Regulation  

Charles Stanley broker jailed over £1.2m Ponzi scheme

Charles Stanley broker jailed over £1.2m Ponzi scheme

A Charles Stanley broker who duped friends out of £1.2m in a Ponzi scheme when he got “out of his depth” was jailed for six years on Friday (20 January).

Stephen Greig, 73, persuaded victims to hand over sums of up to £500,000 for fictional investments, supposedly offering a 7.5 per cent return.

He forged letters on Charles Stanley headed note paper to tell them how well their 'investments' were doing and even paid dividends.

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But from 2006 the married father of two, was using money entrusted to him by old friends saving for their retirement to pay back earlier investors, while helping himself to some of the cash.

Between 2006 and 2012, 10 victims, including Maidstone rotary club, lost a total of £1.2m.

The Old Bailey heard they have been reimbursed by Greig's former employer after he pleaded guilty to a string of fraud charges.

Jailing him for six years, Judge John Bevan QC told him: “I am genuinely sorry that you, as a 73-year-old man of hitherto good character, find yourself facing sentence for a series of serious frauds, but you have brought it on yourself.

“From 2006 to 2012, a long period, whilst in a position of trust as a stockbroker trusted with large sums of clients' money, including friends of yours, you abused that and continued to do so as what was to some extent a Ponzi scheme escalated.”

He added: “You were out of your depth and unable to face what you had done by setting yourself unachievable targets and you could not face reality even when you were arrested as regards your work or your family.

“I accept you are now full of remorse for the victims and your family. You regret your behaviour and the failure to ask for help when you should have done and you have now ended up with nothing apart from a small pension.”

The court heard Greig had worked as a stockbroker all of his life and landed a job at Charles Stanley in 1986.

He began investing in the mid-Nineties and Greig's barrister Jon Swain said it was initially a successful venture.

But he claimed the combination of his client's sleep disorder and the financial crash got him into a “complete mess”.

Prosecutor Gareth Underhill said: “Mr Greig was a stockbroker and the victims were persuaded to invest significant sums of money in investments which in fact did not exist.”

The court heard he created fictional investment funds with legitimate-sounding names such as 'Charles Stanley Capital Bond'.

He targeted victims including his long-term friends, many of whom were saving for their old age.

But the prosecutor said: “By the middle of 2006, the Crown say it is apparent Mr Greig was in fact running a Ponzi scheme, taking new investment funds from clients -  not to invest as he claimed in those named bonds or funds - but to pay back previous investors with whom he had guaranteed returns that clearly he could no longer meet.” The judge said it was not a case where Greig lived an “absurd lifestyle” and prosecutors could only point to £60,000 that he transferred to himself.