Investment director banned for £800K client fraud
16 May 2019
The boss of an investment company has been banned as a director for 10 years, after misappropriating £800,000 from his only client
16 May 2019
Stewart Groves, from Doncaster, was the director of Rapid Finance Ltd, which was incorporated in August 2013, and set-up to make investments on behalf of a single investor, a Premier League footballer.
With an initial investment of £500,000, Groves managed the company under a shareholder and loan agreement.
However, the court ordered the company be wound up in September 2015 following petitions by the sole investor, which triggered further investigations by the Insolvency Service.
This revealed that instead of making legitimate investments, Groves had transferred a significant proportion of the money he was trusted to invest into his own accounts.
To cover his tracks, Groves twice supplied false reports to the investor, including falsified bank statements and accounts, so that they believed he was investing as agreed. These reports encouraged further investments of more than £300,000.
Over the course of two years, more than £800,000 was invested in the company and more than £700,000 of it was transferred to accounts belonging to Groves and connected parties, without the investor being made aware.
Gerard O’Hare, chief investigator for the Insolvency Service, said: ‘Stewart Groves intentionally misled the company’s sole investor into believing his funds were being invested securely and the false reports ‘supplied even lead to more money being provided.
‘This behaviour will not be tolerated and this ban should serve as a warning to other directors tempted to act in a similar way that they have a duty to act in the best interests of the company – not themselves.’
There has been a separate criminal investigation into Groves by South Yorkshire Police that found him guilty of fraud by misrepresentation and has led to an eight-and-a-half-year prison term.