Former Arck partner pleads guilty to £50m fraud

Former Arck partner Richard Clay has pleaded guilty to three fraud charges at a hearing at Southwark Crown Court, following a joint investigation by the Serious Fraud Office and Nottinghamshire Police.

Sentencing is due to take place on 20 February 2015

Clay’s business partner Kathryn Clark pleaded guilty in July and October 2014 to three fraud charges and two counts of forgery. In July, Clay pleaded not guilty to all counts.

SFO head of fraud Jane de Lozey says: “This was a complex and thorough investigation involving financial products which appeared innovative but were in fact part of an elaborate scam. It is another example of the misuse of pension monies and highlights the vulnerability of investors to these types of frauds.”

In 2012 Money Marketing revealed how investors faced losses of around £50m after the liquidation of Arck, a specialist property investment firm that invested pension savings through Sipp firm HD Sipp.

The investigation found savers and IFAs had about £50m invested in Arck products between 2006 and 2012, when the firm went bust.

Early this year Yorkshire Bank – which provided banking to Arck investors – announced it would set up a support scheme to hand back money to investors.

The bank said investors would get their money back plus 2.5 per cent interest, in turn the bank will try to recoup the costs from Arck.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. “This was a complex and thorough investigation involving financial products which appeared innovative but were in fact part of an elaborate scam…”

    Actually officials making these accusations should not be allowed to get away with it. A scam is a con-trick in which 100% of the cash extorted is then taken by the con-man for thier own benefit. In this case, a proportion of the capital raised was invested, albeit in high risk punts, and very, very incompetently. Fraud, yes; scam, no. Can we start to use the English language in the accurate and precise way it appears in the OED and not the mangled, MS Word Thesaurus way which people these days believe authorises full interchangeability of synonyms. A scam is a subset of a fraud, but a fraud is not always a scam.

    Sorry for the pedantry Mrs SFO, but it’s this sloppiness which has caused the public to describe all financial diappointments from heavy overdraft fees to equity market weakness as a “scam” or a “con” when they are no such thing.

  2. And yet, according to the FSA/FCA, intermediaries who recommended these funds and products should have set no store by any of the marketing literature, applied their own slender resources to drill down to find out what was really going on, known all about the nefarious activities being perpetrated behind the scenes and therefore steered clear of them, whilst they, the regulators, accept no responsibility at all. Is that how it works?

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