The City watchdog alleges that Argento Wealth Ltd unlawfully took some £2.8mn as deposits under loan agreements and/or as part of an unauthorised collective investment scheme.
It also alleges that the firm, which has never been regulated by the FCA, unlawfully arranged investments in EMB Fund Limited (EMB) totalling $9mn (£7.5mn) and breached restrictions on financial promotion.
The regulator is pursuing legal action against both the investment firm and its sole director, Daniel Willis.
Investors who lent money to Argento Wealth are likely to suffer very significant losses.The FCA
The FCA alleges that Willis was knowingly concerned in the unlawful activity it has levelled against the firm.
In an announcement today (February 7), the regulator said Argento Wealth and Willis failed to produce credible evidence that it can repay the funds borrowed from both retail investors and EMB, plus the interest due.
The FCA has therefore deduced that Argento Wealth is insolvent. According to Companies House, capital reserves at the firm sat at nearly £64,000 in 2021.
The FCA said it has obtained undertakings equivalent to interim orders freezing Argento Wealth's and Willis’ remaining assets.
"This action has been taken with the aim of protecting investors pending seeking final orders compensating approximately 13 lenders who lent money to Argento Wealth and many others harmed by Argento Wealth’s unlawful investment promotion," the regulator said.
"Despite this, investors who lent money to Argento Wealth are likely to suffer very significant losses. Exact figures cannot be given at present, but AWL’s remaining assets appear to be far below what would be required to return all investors’ money. "
No date has been set for the High Court trial yet concerning the restitution order.
Only after legal proceedings conclude, the FCA said, will it be possible to return any funds to investors.
In the meantime, the regulator said any investors who invested money with or through Argento Wealth should seek independent legal advice.