On 18 March 2014, the High Court made a winding up order against First Capital Wealth Limited (FCW) and the Official Receiver became the liquidator of the company whose duties include safeguarding assets and deciding whether to call a meeting of creditors.
FCW had been promoting the sale of membership shares in a company called Berkeley Brookes LLC (Berkeley Brookes) without the required FCA authorisation. It adopted aggressive and persistent sales practices, making unsolicited calls to investors claiming that:
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- 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;
- Investors would receive guaranteed returns of between 25% and 128% following investments of between 1 to 3 years.
The FCA 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 FOS or the FSCS in relation to their investments.
Tracey McDermott, director of enforcement and financial crime at the FCA, said: "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. If you are called out of the blue by someone seeking to sell you shares our advice is to put the phone down."
Between June and October 2013, FCW collected approximately £660,000 from 27, mainly UK-based, consumers. The FCA is aware that many consumers invested tens of thousands of pounds with the company.
Until the liquidator has completed its investigation into the company’s activities, the FCA is unable to confirm whether any funds will be available to return to investors. The FCA will pass the details of investors to the liquidator who will contact them in due course.
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