On 10 July, the High Court consented to an FCA order by which Samuel Golding, Shantelle Golding, Digital Wealth Limited and Outsourcing Express limited will pay funds held by them to the UK regulator.
The schemes purported to buy wholesale goods from China for onward sale.
Investors were promised unrealistically high returns, in some cases up to 100% of the amount invested.
But no significant trading was conducted and the schemes relied on the continuous flow of new investors to fund existing clients – the clear hallmark of a Ponzi scheme.
Show me the money
The financial watchdog said it took urgent enforcement action to stop the schemes and prevent the disposal of the remaining funds.
They raised just over £15m ($18.7m, €16.7m) from over 1,000 individual accounts.
Of that sum, £9.25m was paid out to investors as returns and the defendants spent about £2.7m; including significant sums on travel, hotels and retail goods.
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.
Too often it’s too late
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “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.”