The High Court has ruled in favour of the Financial Conduct Authority, finding an unauthorised investment scheme must pay the regulator almost £1m to be re-distributed to investors.
On May 14 the court declared Xcore Capital Limited and Jonathan Chitty had carried out an unauthorised investment scheme, which had promised a 6 per cent annual return to investors who were led to believe their money would be traded on foreign exchange and equity markets.
The scheme took in at least £1m from investors, but in reality the money was used to fund a Mayfair office, brokers' wages and Mr Chitty's personal spending.
Mr Chitty spent £102,000 on cryptocurrencies, £58,000 on luxury goods, £24,000 on a Rolex watch and £20,000 towards his wedding.
The court order requires Xcore and Mr Chitty to pay the FCA £917,231, the full value of all outstanding sums owed to consumers, with the regulator distributing to consumers any funds it is able to recover from the scheme and Mr Chitty.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: "Prompt action by the FCA stopped this scheme in its tracks and prevented victims incurring much greater losses.
"Consumers should be especially wary when contacted out of the blue about an investment opportunity, and about financial services firms offering investment opportunities without FCA authorisation.
"If they’re not authorised, it’s probably a scam."
A freezing order was obtained against Xcore and Mr Chitty's assets in November last year, alongside an injunction to stop the scheme selling investments regulated by the FCA.
The court also ruled Xcore and Mr Chitty must meet costs incurred by the FCA in the case.
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