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FCA takes 16 investment firms to court over ‘illegal’ schemes
by Michelle Abrego on Jul 30, 2013 at 13:32
The Financial Conduct Authority (FCA) has taken 16 investment firms to court over schemes it believes to be illegal.
The court action focuses on two investment schemes, African Land, also known as Agri Capital, which offers investments in rice farm harvests in Sierra Leone, and Reforestation Projects, also known as Capital Carbon Credits, which offers investments in carbon credits generated from land in Sierra Leone, Brazil and Australia.
The two schemes are operated by firms African Land and Reforestation Projects respectively.
‘We have asked the High Court to find that Capital Alternatives Limited, African Land, Reforestation Projects and at least 13 other firms and individuals were promoting and operating collective investment schemes (CISs) in the UK illegally and without our authorisation,’ said the FCA.
CISs are regulated by the FCA and a firm must be authorised to operate them from the UK.
The FCA also alleges that the defendants made misleading statements or gave false information when promoting the schemes to investors.
The High Court has ordered a preliminary trail to discuss whether or not the schemes qualify as CISs which should take place in the autumn of 2013.
The FCA has obtained undertakings and court orders that freeze the major assets of most of the defendants and prevent them from promoting the schemes.
If the court decides the schemes have been run or promoted illegally as CISs, it can order for compensation to be paid to the FCA, which will then be paid to investors in the schemes.
The FCA said the value of the assets were not clear at this stage.
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by Jun Merrett on Dec 06, 2013 at 10:31