Regulation  

FSA leaked investigation into Harlequin founder’s son

A local newspaper published a story about a fraud investigation into ‘green finance’ firm boss and son of Harlequin founder David Ames after it was leaked to them by the Financial Services Authority, a court has heard.

Matthew Ames, 38, son of the chairman of embattled property investment firm Harlequin, is accused of cheating ethical investors out of £1.5m through bogus ‘green’ schemes in order to fund a luxury lifestyle.

Mr Ames is now standing trial at Isleworth Crown Court charged with two counts of fraudulent trading. The court has been told he covered up his fraud by using a Ponzi scheme, meaning he was repaying investors with new investors’ money.

It is alleged that Mr Ames took investors’ money for schemes involving teak plantations in Sri Lanka and rainforest protection while running the Investor Club and Forestry for Life, however it is claimed that no land was ever purchased by the two companies and not a single tree was ever planted.

Jurors heard that an article by the Basildon Echo was written about an investigation by the Financial Services Authority into Mr Ames in August 2010, as both firms were run in Essex.

The article was only published after the Essex newspaper received confirmation from the regulatory body that it was investigating Mr Ames.

Adam Budworth, defending Mr Ames, said Mr Ames only found out about the FSA’s investigation into his two businesses through the Echo’s article. The story was also later published in the Daily Mail.

Matthew Richards, who investigated Mr Ames for the FSA, told jurors that a reporter from the Echo had phoned their press office asking for confirmation about their probe into Ames’ businesses.

Mr Richards said: “I think the paper already had a story and needed confirmation. The head of department told our press office and our press office confirmed that we were investigating.

“I believe that the press office would get a call and ask for a comment - if the FSA were investigating - and they would say ‘yes’.”

Mr Budworth said the FCA later falsely denied Mr Ames was under investigation when he called them days after the story was published.

Mr Budworth said: “I can’t understand why you’re investigating a company and you just leak or let it be known to the Basildon Echo that you’re carrying out an investigation without going to the company first.

“Once the story goes into the Basildon Echo you must surely understand that a press article coming out, saying the FSA are investigating this company for breaches of financial regulations, amounts to the death knell for any financial company.”

Mr Ames is accused of securing a total of over £1.1m in investments into the Investor Club by tricking punters into believing they were for teak tree plantations in Sri Lanka. His second company, Forestry For Life, took over £400,000 by purporting to protect the Brazilian rainforest.

Both Forestry For Life and Investor Club were placed into liquidation in March 2011 with combined debts of more than £1.6m.