The Financial Conduct Authority has started legal proceedings against Park First Limited and its senior managers with the aim to win compensation for investors who have suffered a loss after investing in the car parking scheme.
The regulator announced today (October 17) that it has lodged a claim against Park First Limited, its senior managers, including its chief executive officer and a number of other companies connected to the Park First group.
The regulator asked the court to order Park First to pay a sum to the FCA which can then be distributed among the investors who suffered losses.
In a statement on its website the regulator said: "The FCA is now of the view that it is necessary to start proceedings against the defendants.
"In doing so, it expects the defendants to continue to co-operate with the administrators and to honour their commitments.
"The FCA is concerned, however, that unless proceedings are brought, it will not be possible to ensure that the defendants take all the steps that they should to reduce investors’ losses.
The Park First scheme raised approximately £230m from 4,500 investors, according to the FCA.
The FCA alleged it involved an unauthorised collective investment scheme which was set up to operate car park investments using funds from investors.
Investments in the car parking schemes were sold to individuals and corporates in the UK and internationally, both directly and through self-invested personal pensions.
The FCA also alleged that the scheme was promoted to investors using false or misleading statements.
This included telling people they could expect to see returns of 10 per cent in the third and fourth years of their investment and 12 per cent in years five and six.
According to the FCA Park First had no proper basis for these statements.
Investors were told the investments were worth 25 per cent more than the price they were being sold at but the FCA said that the scheme was aware that these valuations were based on unrealistic returns.
The FCA also wants a “declaration that the schemes were collective investment schemes and that the defendants have unlawfully established, operated and promoted them and that the defendants made false or misleading statements and impressions about the schemes”.
In addition it asked for injunctions to stop this from happening again.
Four of the Park First companies involved in the scheme were placed in administration in July 2019.
This included Park First Freeholds, Help Me Park Gatwick, Park First Glasgow Rentals and Park First Gatwick Rentals, which were involved with the operation of car parking schemes close to Gatwick and Glasgow airports.
Last month, (September 6), administrators Smith & Williamson warned fraudsters have been trying to imitate the firms to lure investors into parting with their assets.
In a letter sent to creditors the administrators stated: “The administrators are aware that some investors have received unsolicited calls/ emails from parties implying that they may be working on behalf of the administrators and/or of Smith & Williamson LLP and offering to purchase, or facilitate a sale of, their car parking space(s) in return for an upfront payment.