A suspected boiler room has had an unlimited worldwide asset freezing order placed upon it by the Financial Conduct Authority (FCA) after a High Court judge agreed that First Capital Wealth Limited (FCW) posed a serious risk to consumers.
The hearing took place at the High Court on Friday 15 November 2013.
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As well as the asset freeze (which prevents the firm from selling its assets) the court order also stops FCW from selling investments regulated by the FCA.
Tracey McDermott, director of enforcement and financial crime at the FCA, said: "We have a statutory objective to secure an appropriate degree of protection for consumers and to protect and enhance the integrity of the UK financial system. Stopping boiler rooms and other investment frauds, who rip-off consumers and tarnish the reputation of honest, hardworking, investment firms, is therefore an important part of the work we do."
The FCA believes that at least 20 investors together invested more than £650,000 in Berkeley Brookes LLC between July and November 2013.
The FCA has taken this action because it suspects FCW was arranging and promoting the sale of investments in Berkeley Brookes LLC without FCA authorisation; this is in breach of sections 19 and 21 of the Financial Services and Markets Act (2000).
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By GlobalDataThe FCA will be sending a letter to FCW’s customers to keep them informed of developments. If customers do not receive these letters by 22 November 2013 they should contact the Consumer Helpline on 0800 111 6768.
While the FCA will do everything it can to try to return money to investors, often consumers that invest with, or via, unauthorised firms lose much of their money because the scam firms often have few assets and are not covered by the Financial Services Compensation Scheme.
The FCA also recommends that people who have already invested via FCW be extra vigilant for follow up scams. Often people who have been targeted once by a boiler room are targeted again and again.
Sometimes, cold callers will also claim that they can get an investor’s money back if it has been taken by a boiler room – this is a known as a ‘recovery room’ scam and consumers should be very wary of them.
