The Financial Conduct Authority has secured high court approval to compensate the victims of a series of unauthorised deposit taking and collective investment schemes.
The regulator will be able to give out £3.42m in redress to those affected.
The schemes were run by Samuel and Shantelle Golding and their companies Digital Wealth Limited, also known as Digital Wealth Society (DWS), and Outsourcing Express Limited (OEL), also known as Kerchiing.
The watchdog said that the schemes are believed to have been involved in the “online purchase of wholesale goods from China for onward sale” between 2015 and 2017.
They promised unrealistically high returns, “in some cases up to 100% of the amount invested”, the FCA added.
But there is no evidence of any significant trading being conducted by the schemes, as they relied on a continuous flow of investors to fund the existing customers’ returns, according to the watchdog.
The Goldings admitted to the high court that they were personally involved in the scheme.
Partial redress
The various schemes managed to raise more than £15m from over 1,000 individuals.
When the FCA was made aware of the unregulated activities, it took “immediate enforcement action” to prevent the disposal of the remaining funds.
Despite these efforts, a shortfall was identified for both companies; nearly £3.3m for the DWS deposit taking scheme, and £834,402 for the OEL collective investment scheme.
The regulator has managed to recover over £3.4m from various bank accounts holding the schemes’ proceeds, which will be returned to the 356 qualifying investors in the DWS scheme and 250 in the OEL one.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The FCA took action as soon as it became aware of these illegal schemes, preventing further losses to future investors who would be unable to exit the scheme before it inevitably collapsed.
“In this case, we managed to save some money for investors: too often it is too late. These firms were not authorised by the FCA and, as we always say to consumers, if a scheme looks too good to be true, do not invest.
“We have worked very hard to identify people eligible to receive compensation from these schemes and are pleased to have been able to recover and return some of their money.”
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