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High Court winds up unregulated investment scheme

High Court winds up unregulated investment scheme

An unregulated investment scheme which "vastly overstated" promised returns to investors has been wound up by the High Court. 

The Insolvency Service first investigated Kent and London-based Dow And Jones Limited amid complaints from investors about its trading practices. 

Investigators found the company sold wine to members of the public as an unregulated investment opportunity, with vulnerable clients also targeted by its sales tactics. 

Irshard Mohammed, senior investigator at the Insolvency Service, said the company ran itself in a similar way to boiler room operations.

Mr Mohammed said: "Dow and Jones used sales scripts from previously failed companies, which assisted salesmen to convince people, including the vulnerable, to invest their money in unregulated investments."

The Insolvency Service said Dow and Jones usually sold the stock to those investors at double the normal retail price, making it "unlikely' they would ever get their original capital back or make a profit.

According to the government body sales staff working for the company also falsely claimed to investors additional purchases were required to ensure that a "portfolio of wines could be sold quicker and at a higher price".

Dow And Jones was wound up on March 17 in the High Court of Justice before Deputy Judge Jones, with an official receiver - a civil servant with the Insolvency Service - appointed as liquidator.

Mr Mohammed added: "Even those customers who received the wine they had paid for lost a sizeable proportion of their investment, as the wine was materially overpriced.

"The courts recognised the unscrupulous nature of Dow and Jones when it wound-up the company and our advice is always to reject unsolicited investment offers that sound too good to be true."

Deputy Judge Jones told the court there was something "extremely wrong" about Dow and Jones and warned the promised returns to investors had been "vastly overstated".

rachel.mortimer@ft.com 

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