View more on these topics

Investment fraud victims to get £2.9m back after FCA intervention

FCA logo new 3 620x430

Victims of a £5.5m unregulated investment scam are set to lose almost half of their money after a judge ordered funds retrieved from two ringleaders be returned to investors.

Southwark Crown Court today ordered almost £2.65m to be returned to around 100 people who fell victim to the scheme, which was established and operated by Alex Hope.

In addition, Hope has been hit with a £166,696 confiscation order which he must pay in full in three months. If he doesn’t, Hope will face a further 20 months in prison on top of the seven year sentence he was handed in January last year.

Today’s order follows a similar order placed on Raj Von Badlo, Hope’s co-defendant, who was ordered to pay £99,819 at a hearing in December. This sum must also be paid in full within three month or he will be hit with a 15 month prison sentence on top of the two-year sentence he was given in January last year.

The FCA says investors will receive “in excess of £2.9m” back following the ruling – just 55 per cent of the sums invested.

FCA director of enforcement and market enforcement Mark Steward says: “This is the largest sum returned to victims of crime following an FSA/FCA prosecution and is the result of quick action in the first instance to restrain the proceeds of Mr Hope’s offending. The FCA will continue to work hard to ensure wrongdoers are held to account not only for their wrongdoing but also for its consequences, especially to victims, to the fullest extent possible.”

The scam centred on Hope’s claim he would trade investor’s money successfully on the foreign exchange markets. In reality, only 12 per cent of the total money investors gave Hope was ever traded and when he did trade, “he lost almost all of the money in his trading accounts”, according to the FCA.

Hope exaggerated his trading abilities and the returns he was making, and used doctored copies of statements from his trading account to mislead investors.

Von Badlo promoted Hope’s scheme to a large group of investors. Over 75 investors gave £4.29m to Hope as a result of Von Badlo’s actions, the FCA says.

Hope used over £2m of investors’ money to fund his lifestyle. He spent over £1m in a casino, over £200,000 on designer watches and shoes, £60,000 on foreign travel, and over £600,000 in bars and nightclubs in London, Miami and New York.

Recommended

FCA interior logo 620x430
15

Should FCA toughen up on non-advised drawdown?

The FCA is being urged to introduce a warning system for savers in non-advised drawdown amid concerns their pots could be eroded away as stock markets plummet. Drawdown sales have rocketed in the wake of the pension freedoms, with thousands of customers exposed to stock market risk in retirement without speaking to an adviser. At […]

Exit-Man-Door-Depart-Leave-700.jpg

Which? director Richard Lloyd to leave consumer champion

Which? executive director Richard Lloyd is stepping down in May after five years at the consumer champion. Lloyd, who joined Which? in April 2011, says he will take a break over the summer before pursuing a new role. He leaves on 20 May. He says: “I am immensely proud of how many more people Which? […]

Rock Caspar Architas 2014

Architas’ Caspar Rock: Taking the long view in times of volatility

Architas chief investment officer Caspar Rock explains why he’s backing longer-dated bonds and considers the implications of the UK potentially leaving the EU this year. Long duration assets Despite the strong run in gilts, especially very long-dated ones, duration in fixed income portfolios is still a vital means of diversification. The markets remain fixated on […]

Life begins at…

By Fiona Holmes, proposition communications manager Having reached a certain age (it’s the new 40 by the way), I’m having to come to terms with the fact that my peers and I aren’t as immune from illness or death as we’d like to think. That’s the problem with 30 being the new 20 and 40 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. This is potentially a good news story but will these felons ever actually pay up? All too often we hear a blaze of publicity around confiscation orders etc, but our hamstrung law enforcement agencies find they are powerless to follow through.
    Let’s hope this is a break from that mould

  2. One question; how much did it cost the FCA (US and our clients) to go running off and track down and bring to book the perpetrators of an “un-regulated” scam ?

    Is this not the job of the fraud squad, police or the CPS ?

    Mark Steward seems quite happy with his work

  3. Quite agree DH, why are the FCA looking at un-regulated investments at all? If the FCA wish to act as a public champion on un-regulated matters they should be publicly funded. Well done on a conviction; though it should be realised by not paying the compensation order, after the 20 months is added to the sentence, the reality is served time of 10 month when reduced with early release. To someone coming out of prison with no likelihood of earning decent money in future, most con’s would take this £177,000 as a nice well paid option.
    This disparity of potential earnings over lenient sentences means we are unlikely to see any of the money returned when choice comes in to play and if you gave most cons an option of prison at £17,700 a month – they would stay for a lot longer than ten months with a gleeful realisation crime sometimes does actually pay very well indeed.

Leave a comment