Regulator freezes assets of suspected land banking firm

The Financial Services Authority (FSA) has frozen the assets of suspected land banking firm, Asset L.I. which also traded as Equity Services (London), and Asset Land Investment.

The FSA said that following a court order made on 13 July 2013, it was able to secure asset freezing orders on the firm as well as three individuals that cannot be named for legal reasons.

The FSA suspected that Asset L.I had been running the land banking operation, an activity it believes amounts to an unauthorised collective investment scheme.

The freezing order was achieved with the West Berkshire Trading Standards and the Metropolitan and Essex police forces, which have arrested one individual involved.

The FSA has also obtained court orders to prevent any of the companies or individuals from selling plots of land on particular sites, as there are pending investigations by the regulator and other agencies. There are also ongoing civil proceedings, it said.

The firms are believed to have promoted and sold plots of land in Stansted, Harrogate, Lutterworth, Newbury, Liphook, and South Godstone.

Tracey McDermott, FSA acting director of enforcement and financial crime, said: ’This is a further example of the FSA working with other agencies and taking action to protect consumers from unauthorised land banking firms and the individuals behind them.

‘Anybody investing in land should always have it independently valued to check its worth. Further, if you are ever sold land as an investment, and on the basis that someone else will manage it for you as part of a wider site, you should check that the firm is authorised by the FSA.’

The FSA does not regulate the sale of land, but land banking often amounts to collective investment, which requires FSA authorisation.

In March 2012, the regulator won a £32 million High Court battle against three land banks.