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High Court winds up £660k boiler room scheme

The High Court has issued a winding-up order against First Capital Wealth Limited following an intervention by the FCA.

The regulator says FCW had been promoting the sale of membership shares in a company called Berkeley Brookes LLC without the required FCA authorisation. 

The FCA says FCW adopted aggressive and persistent sales practices, making unsolicited calls to investors claiming Berkeley Brookes was intending to construct a luxury development of 20 villas on a plot of land next to a golf course on the island of Madeira.

The firm told investors they would receive guaranteed returns of between 25 per cent and 128 per cent following investments of between one to three years.

Between June and October 2013, FCW collected approximately £660,000 from 27, mainly UK-based, consumers. The FCA says many consumers invested tens of thousands of pounds with the company.

FCA director of enforcement and financial crime Tracey McDermott says: “FCW was promising guaranteed returns that, in our experience, are simply not achievable.

“Protecting consumers from unauthorised businesses is a vital part of the work we do but many people still lose money as a result of such investments every year.”

The FCA says it intervened to wind up FCW because it was unauthorised and because it was concerned about FCW’s ability to repay investors. 

Because FCW is unauthorised, customers who invested through FCW have no recourse to the Financial Ombudsman Service or the Financial Services Compensation Scheme.

Informed Choice managing director Martin Bamford says: “Investors need to be incredibly wary when someone calls offering guaranteed returns at this level when interest rates are 0.5 per cent, especially when the firm involved is not authorised.”



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