FCA issues 7 scam alerts on unregulated firms in a week

Added 25th April 2016

The UK’s Financial Conduct Authority (FCA) has blacklisted a number of firms it believes are providing financial services without authorisation.

FCA issues 7 scam alerts on unregulated firms in a week

International Mergers, RBS Bourse, Capital Trust Ventures, Andersen Consulting (UK) and Beckett & Cromwell have all been named by the regulator as firms targeting people in the UK - offering, promoting or selling financial services or products without being FCA-regulated.

The FCA also issued warnings against New York-based Carlson & Clarke Management Group and UK firm Explore Markets, making public the contact details for each firm.

In its warning, the regulatory body said bogus firms often claim they have FCA authorisation in a bid to attract customers to share scams.

“Some firms act without our authorisation and some knowingly run scams like share fraud,” said the authority on its website. 

‘Boiler room’ scams

Share scams are often run from ‘boiler rooms’ where fraudsters cold-call investors offering them worthless, overpriced or even non-existent shares.

This was the case in June 2014 when Jeffrey Revell-Reade and Anthony May were convicted of running one of the largest boiler room fraud schemes - conning £70m ($100.7m, €89.7m) out of investors - ever pursued by a UK authority.

The fraudsters were found guilty of setting up bogus stockbroking firms in Madrid which used high-pressure sales tactics to flog shares worthless shares in US-listed companies.

Last week, the pair were ordered by a London court to pay their victims £11m in compensation.

FCA regulated

To avoid such scams, the FCA urged people to check the Financial Services Register to ensure that firms are regulated by them.

It warned that consumers giving money to unauthorised firms are not be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme.

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Not even half measures

When the worst that can happen if you trade without authorisation is that the FCA will issue a public warning that's here-today, gone-tomorrow, then it's clearly worth the risk. The chances of prosecution are so small as to be virtually invisible. Warnings can't even be regarded as half measures; they are far less than that. Whatever happened to consumer protection, and protecting the reputation of the industry?

Posted by: Tony Hetherington, 26 Apr 2016

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Monira Matin

Senior Reporter

Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.



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