A London-based broker that conned elderly investors, including one with dementia, into buying 'worthless' investments has been ordered into liquidation
Cutler and Ross, described by investigators at the Insolvency Service as selling 'almost anything you can think of', including wine, worthless coloured diamonds and oil investments, has been wound up by the high court following a petition by the Secretary of State for Business, Energy and Industrial Strategy.
The company's brochure marketing its coloured diamonds told investors it was a "boutique brokerage" sourcing "rare natural coloured diamonds for buyers seeking to diversify their portfolio".
It claimed to use its "global network" to source the "best quality, conflict free diamonds" and assist in the "colour selection, size and other characteristics of the diamonds" to "maximise" returns.
In reality, the firm acted as a broker for just one supplier. It made total diamond sales of £288,673, on which it earned £203,816 in commission.
The Financial Conduct Authority (FCA) warned Cutler and Ross Limited in 2014, then trading as Sussex Associates, that it had breached the Financial Services and Markets Act 2000 (FSMA), which sets out who can engage in promoting investments and in regulated activities.
Assuring the FCA that it would not knowingly contravene FSMA, it continued to market investments breaching regulations, including selling £728,000 of oil investments.
After the FCA issued a public warning about Sussex Associates, the company changed its name twice, first to Compare Markets Limited and later to Cutler and Ross.
Cutler and Ross' sole recorded officer, John Rimmer, admitted to investigators that the name change was simply to get around the FCA's warning.
Mr Rimmer told investigators that Cutler and Ross was just an introducer. However, this was not supported by the evidence found during the enquiries.
Despite denials from the company, the investigation found that it also sold investments in art and storage units.
Alternative investments sold by the firm were valued at more than £3m. Cutler and Ross received commissions of no less than £1,384,662.
Many of the investors targeted by the firm were elderly and vulnerable. One investor who was fleeced by the company suffered from dementia.
"The company persuaded members of the public to part with substantial sums of money by promising extremely high rates of return," said David Hill, a chief investigator at the Insolvency Service.
"In reality the investments were promoted only because they paid high rates of commission to the Company and were in fact not much more than worthless.
"We work closely with a number of partners to prevent unscrupulous companies fleecing the vulnerable and the Insolvency Service will continue to investigate and bring to a halt the activities of companies harming or about to harm the public by operating in this way."