Man banned for 14 years after £360k fraud

Man banned for 14 years after £360k fraud

A man has been banned for 14 years after investors were defrauded of £360,000.

The High Court has disqualified Benedict Moruthoane, 51, from acting as a director after concerns were raised about his conduct relating to Sutter Capital.

The company was incorporated in June 2018 and promised investors returns of between 15 per cent and 22 per cent on bonds based on arbitrage trades in the African gold mining market.

Some £360,000 was raised from investors between September and December that year, despite the company’s promotional material not receiving approval under section 21 of the Financial Services and Markets Act.

The marketing material also contained inaccuracies, the Insolvency Service said today (August 12).

Sutter Capital did receive approval for three bonds in October 2018, however these were only allowed to be marketed to certain investors, restrictions the company did not stick to.

The group ceased trading in December 2018, and concerns were raised by the administrators about the directors’ conduct.

The Insolvency Service said the subsequent investigation established that, as well as misleading potential investors with information in the marketing material, the company had failed to keep or maintain adequate records.

All that was provided to investigators was a single spreadsheet showing payment for salaries, commission and expenses, but no investment activity.

The sole director of the company, Eugeniu Sculea, was disqualified for 11 years in 2021.

However, the High Court said Moruthoane had acted as a de facto director of Sutter Capital.

He will be disqualified on August 16, for 14 years, which means he is prevented from directly or indirectly being involved in the management, promotion or formation of a company without the permission of the court. 

Chief investigator at the Insolvency Service, Ian Wilson, said: "Sutter Capital only traded for three months, supposedly raising investment for gold arbitrage trading.

"But in that short time it took hundreds of thousands of pounds from would-be investors, to whom it promised outrageously high returns.

"This case should serve as a warning that any investment scheme that sounds too good to be true is almost certainly is."