FCA secures High Court order against unauthorised firm

The Financial Conduct Authority has announced that is has secured a worldwide freezing order in the High Court against an unauthorised firm that it says has arranged at least £650,000 worth of overseas property investments since July.

According to a statement from the regulator, the freezing order was granted on 15 November against First Capital Wealth Ltd, which it suspects has been engaging in ‘boiler room’ sales tactics and “posed a serious risk to consumers".

The firm is said to have been promoting investments in Berkeley Brookes LLC, which manages overseas real estate investments in Madeira, Portugal, between July and November of this year. At least 20 investors are thought to have invested a combined £650,000, the FCA said.

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As well as the asset freeze preventing the firm from selling its assets, the court order also stops the firm from selling investments regulated by the FCA.

The FCA said it will be sending a letter to First Capital’s customers to keep them informed of developments. It cautioned that consumers may not be able to get their money back as such “scam firms” often have few assets and are not covered by the Financial Services Compensation Scheme.

It also recommended that people who have already invested to be extra vigilant for “follow up scams”, warning that people who have been targeted once by a boiler room are often targeted “again and again” and are also often the subject of “recovery room scams” where cold callers will claim that they can get an investor’s money back for a fee.

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.”