The High Court has ordered directors of an unauthorised investment firm to pay £3.4m to the FCA, which will distribute funds to people who unintentionally invested in ponzi schemes.
Samuel and Shantelle Golding of Digital Wealth and Outsourcing Express operated unauthorised investment schemes, which pretended to involve the online purchase of wholesale goods from China for onward sale, the FCA said. The schemes promised “unrealistically” high returns – in some cases up to 100 per cent of the amount invested.
However, the schemes were UCIS and conducted illegal deposit-taking, in contravention with the Financial Services & Markets Act 2000.
The enterprise was a ponzi scheme, as the FCA says: “No significant trading was conducted and the schemes relied on a continuous flow of new investors to fund existing investors’ returns.
“Samuel and Shantelle Golding admitted to the court they were personally involved in these contraventions.”
The schemes raised just over £15m from more than 1,000 individual accounts. The FCA said it took “urgent enforcement action to stop it and prevent the disposal of the remaining funds.”
Of the £15m that was raised, £9.25m was paid out to investors as returns. The FCA said the defendants spent around £2.7m, which included “significant sums” on travel, hotels and retail goods.
The court order confirms that the Goldings will pay all funds held by them to the FCA for distribution to investors.
As a result of this action, the FCA will take control of approximately £3.4m which will be distributed to affected consumers, leaving them with a loss totalling at least £2.7m.
FCA enforcement and market oversight executive director Mark Steward says: “The FCA took action as soon as it became aware of this illegal scheme, preventing further losses to future investors who would be unable to exit the scheme before it inevitably collapsed.
“The FCA again reminds consumers not to invest in schemes being offered by firms that are not authorised by the FCA and that look too good to be true, like these ones. In this case, we managed to save some money for investors: too often it is too late.”
The FCA started its investigation in September 2017 and commenced proceedings in the High Court on 4 February this year.
The High Court order was made on 28 June 2019.