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FCA imposes worldwide asset freezing order

In a demonstration of the range of powers available to it, financial services regulator the Financial Conduct Authority (FCA) last week successfully applied to the High Court for an unlimited worldwide asset freezing order to be placed upon a company suspected of conducting boiler room activities.

The judge agreed that First Capital Wealth Limited (FCW) posed a serious risk to consumers. The FCA suspected that FCW was arranging and promoting the sale of investments in a company known as Berkeley Brookes LLC without FCA authorisation; this is in breach of sections 19 and 21 of the Financial Services and Markets Act (2000).

As well as the asset freeze (which prevents the firm from selling its assets) the court order also stops FCW from selling investments regulated by the FCA.

These two orders represent just two of the civil enforcement powers given to the FCA under the Act. Others include:

  • Restitution orders;
  • Insolvency orders;
  • Injunctions to prevent unlawful financial promotions; and
  • Injunctions to prevent someone committing market abuse.

The FCA also has the power to prosecute certain criminal offences, including:

  • “falsely claiming to be FCA authorised;
  • carrying on a regulated activity without authorisation;
  • making misleading statements to induce investments; and
  • failing to co-operate with FCA investigations.”

Boiler room activities continue to be popular amongst the criminal fraternity, and professional advisers such as solicitors and accountants need to ensure that their anti-money laundering procedures are up-to-date so as to minimize the risk that they might unwittingly find themselves acting on behalf of a fraudster.

This is a complicated area and there will be occasions when expert assistance may be required.

Contact Jonathan Fisher QC

For specialist advice on issues of corporate, regulatory or financial crime, contact Jonathan Fisher QC on +44 (0)20 7427 463 or click here to make an electronic enquiry.

 

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The views expressed in this article represent those of the author and not Bright Line Law.

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