The UK’s Financial Conduct Authority has charged three individuals with fraud for their alleged involvement in an £8m high-risk trading scheme, which targeted people’s pension savings.
Kristofer McGuire, Keith Williamson and Karla Walker have been charged with multiple offences, including fraud by false representation and fraudulent trading, after they targeted victims by persuading them to invest in contracts for difference (CFDs).
CFDs are a high-risk investment product used to bet on the price of an asset.
Many victims of the alleged fraud were encouraged to use their pensions to invest which were then traded to generate large commissions for those running the scheme, with victims’ pension funds almost entirely lost.
The FCA alleges that McGuire, Williamson and Walker made false statements to a trading platform that their clients were professional investors.
Williamson and McGuire are accused of fraudulent trading, and McGuire faces five further counts of fraud by false representation.
The total known loss to victims is over £8m.
The defendants will appear before Westminster Magistrates’ Court on 7 June 2024.
The FCA alleges:
- Between 1 January 2015 and 30 June 2017 Kristofer McGuire, Keith Williamson and Karla Walker made untrue and misleading representations to a CFD trading platform that clients met the qualifying criteria for professional investors when in reality, they did not.
- Between 1 January 2015 and 30 June 2016, Keith Williamson and Kristofer McGuire engaged in fraudulent trading using detrimental trading strategies when trading CFDs to generate excessive commissions at the expense of investors.
- Between 1 April 2016 and 28 February 2023, Kristofer McGuire made further untrue and misleading representations to 5 individual investors to persuade them to invest their money through him and/or his firm K&K Consult LTD.
Fraud by false representation is an offence under section 2 of the Fraud Act 2006 and is punishable on indictment by a fine and/or up to 10 years’ imprisonment.
The FCA has previously said that 80% of customers lose money when investing in CFDs because of the risks. They are often highly leveraged, which means they use debt to try and amplify returns, which can result in investors losing more than they invested. In the UK, the FCA has imposed restrictions on how CFDs and CFD-like options can be sold and marketed to retail customers. The FCA has been carrying out work to address consumer harm in the UK in this sector.
