FCA halts £1m unauthorised investment scheme
24 May 2019
The Financial Conduct Authority (FCA) has won a legal case against an unauthorised investment scheme, which took in at least £1m from investors, most of which was spent on promotions and luxury purchases
24 May 2019
Following an application by the FCA, the High Court declared that Xcore Capital Ltd (Xcore) and Jonathan Chitty had carried on an unauthorised investment scheme.
Consumers gave money to Xcore in return for a 6% annual return. They were led to believe that Xcore would be trading their money on forex and equity markets.
However, the majority of this money was instead used to fund an office in Mayfair, brokers’ wages and Chitty’s lifestyle. Chitty’s personal spending included £102,000 on cryptocurrencies, £58,000 on luxury goods, £24,000 on a Rolex watch and £20,000 towards his wedding.
The court order declares that Xcore ran a deposit taking scheme without the necessary authorisation by the FCA, and that Chitty was knowingly concerned in the scheme. It further requires Xcore and Chitty to pay the FCA £917,231 which is the full value of all outstanding sums owed to consumers, and which the regulator will distribute to them.
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.'