Legal Advice for Victims of Investment Fraud
‘£1.2 billion is lost to investment scams in the UK every year’ – Financial Conduct Authority (FCA)
We all know there can be a fine line between a legitimate business failing and investment fraud – something may happen that causes a business to become fraudulent, or a scam can be set up and ran to look like a legitimate investment opportunity. Yet regardless of how investment fraud arises, if you get stung, the important thing to remember is to not give up hope.
At Selachii, our tenacious, commercially-minded solicitors provide expert advice and assistance in all manner of investment fraud matters. We have a proven track record helping creditors and investors recover funds, both in the UK and abroad, with particular expertise in cases involving bitcoin scams and binary option trading fraud.
Give yourself the best chance of getting your money back. Contact us for more information.
Investment Fraud & Scams
Investment rarely comes without a level of risk, but that risk increases exponentially for those unaware of the tactics of predatory fraudsters. The first protection against becoming a victim of a scam is to spot the signs:
- Any investment that sounds too good to be true probably is
- Be cautious of unsolicited phone calls, emails or letters offering one-off investment opportunities
- Don’t be pressured into an investment. Give yourself time to do due diligence so you can make an informed decision
- Get advice from a government body, such as the Financial Conduct Authority (FCA), or an independent professional financial adviser you trust
- Don’t be bitten twice. Avoid follow-on frauds, where scam organisers pass on the details of investors they’ve swindled to other fraudsters
The second protection is to get your money back by enforcing your rights as a creditor. We’ve recovered funds for our clients in a wide range of investment fraud and scam cases, including for those who have fallen victim to:
- Unauthorised firms and individuals running investment scams such as share fraud
- Cloned firms
- Bitcoin and other digital currency scams (read more about digital currency litigation here)
- Land development and banking scams
- Wine investment scams
- Carbon credit scams
- Boiler room fraud
- Ponzi or pyramid schemes
- Identity theft
- Mis-sold investments, such as pensions or bonds, by a bank or other financial adviser
Owing to our experience helping clients recover funds in investment fraud cases (such as those listed above), we have considerable knowledge of the sophisticated ways investment scams target investors and are operated, as well as how professional misfeasance can cause people to lose money. This expertise means we’re ideally placed to help creditors and investors get compensation by holding fraudsters and negligent professionals to account.
Investment Fraud: Our approach to recovering funds
Even when companies have been set up with fake information, we’ve still been able to freeze bank accounts and other assets in order to recover funds on behalf of our clients. Our approach is based on our knowledge, experience and collaboration, working with forensic accountants and other experts, as well as national and overseas fraud agencies, in order to trace and recover our clients’ assets in both the UK and abroad.
There are many difference legal avenues open to investors and creditors who have fallen victim to an investment scam or fraud and looking for recourse. At Selachii, we explore each of these and carry out thorough investigations to find the best possible solution for our clients.
In most cases, legal action is taken against the company responsible for eliciting the investment by serving a winding-up petition to enforce the payment of debt. The matter goes to the Official Receiver, and then our expert investment fraud solicitors and specialist insolvency practitioners and liquidators start an investigation to recover our client’s funds, either from the company itself or against individuals responsible for the company and therefore accountable for the loss of funds.
In order to directly pursue an individual fraudster under the civil law for the repayment of funds they’ve misappropriated, there must be evidence of some kind of wrongdoing, such as misfeasance, misrepresentation or unjustified enrichment. If the investigative and prosecuting authorities have information on the fraudster, usually because they’ve got a criminal conviction, we work to get access to this data. It’s also important to keep in mind that the civil standard of proof, which only requires to be proved on a balance of probabilities, is lower than the criminal standard of beyond reasonable doubt.
As well as acting for individuals and businesses, we have also acted in class actions (also known as multi-party actions), where the same fraud has been committed against many individuals. This means that an individual unable to recover funds because of the costs and time involved can have recourse by pursuing legal action as part of a group.
We take pride in building case-winning strategies tailored to the needs and budget of our clients, and are expert in tracing and recovering assets in both the UK and overseas. If you require first-class, cost-efficient legal advice on investment fraud, or any other commercial dispute matter, please contact us.
Anyone who is cold called by a so called investor, Independent Financial Adviser or Trader, should never make any form of monetary payment. When investing, the advice of an authorised Independent Financial Adviser should be sought.
The best position to be in is to avoid falling foul of scammers. Any firm offering investment advice in the UK should be regulated by the Financial Conduct Authority, which has a web page offering advice on how to minimise the risk of being scammed and ensure a firm is regulated.
Regulation does not mean that your investment is safe, but it does mean that there may be some redress in the event that the investor suffers a loss and the likelihood of the setup being a scam is less likely.
Not all scams begin as such: a bona fide business may trade unsuccessfully, leading the directors to try to continue to trade in the hope that future profits will enable past losses to be covered. This can continue well past the time that there is any reasonable prospect of new money coming in being repaid.
It should be remembered that, no matter how impressive the website, the Internet is effectively unregulated and online investment frauds are increasing in scale daily. The 'UK presence' of such fraudsters is generally fake, with the real 'business' being commonly based in Cyprus, Israel or a tax haven jurisdiction offering secrecy of ownership.
Common Investment Scams
Scams often seen include:
Shares in small companies or options
Typically offered by 'boiler rooms', these offer a ground-floor opportunity in a business whose value is set to skyrocket. Boiler rooms can be very sophisticated and will often take several weeks to 'get to know' the client, identifying their wealth and weaknesses before they make their pitch.
There have been a number of fine wine scams over the years. These scams can seem quite benign, with the comment often made that 'even if the wine doesn't rise in value, you can always drink it'. That assumes the wine has ever been purchased in the first place, which in many cases it has not.
A land bank scam involves the acquisition of almost worthless plots of land which are then sold to investors on the basis that planning permission will be obtained which will drive the value up significantly.
Bitcoins are unregulated and the value of the bitcoin has varied between £1.30 to £751 over the last four years. There is no regulation on the bitcoin market, and the value of bitcoins is neither represented by any central bank reserves nor backed by any government. A variety of scams are possible.
Normally sold by cold calling in a way similar to small company share scams, these frauds can be very sophisticated, with websites including trading platforms set up, allowing the investor to see their 'trading profits', which aids the appearance that the scammers are a legitimate investment business. Individual investors have lost more than £1 million in these scams.
In this scam the appearance is given of the scammer representing a real and reputable firm. Often, a very credible fake website will be set up, which may look almost identical to that of the real firm, although typically the contact details will be different.
Case Study: Financial Scam Help
Our client came to us having fallen prey to scammers: we promptly brought a winding-up order against the company involved and obtained an asset freezing order. Working with the liquidator, we were able to assist in tracing the assets before they were dissipated and obtain a much better dividend for creditors than would have been possible had there been a delay.
Fighting Internet and Investment Crime
We are currently assisting with raising awareness of these scams and we are also actively involved in global operations to identify the fraudsters to have their assets frozen and recovered for creditors.
We have liquidated several UK based companies involved in these frauds and are actively seeking international freezing orders on banks to control the funds the bank hold to return to creditors. It is a long process but will ultimately succeed at the expense of the fraudster.
How we can help if you fear you have been scammed
Contact Selachii now…speed is of the essence. We have a proven record of recovering assets from scammers across the world, even in cases in which the company which carried out the scam is insolvent.
Our international litigation expertise and ability to act fast are crucial strengths in maximising the possibility of a successful outcome, minimising the loss if possible and obtaining speedy restitution.
Selachii is a dynamic litigation and dispute resolution law firm based in Kensington, London. We put the best interests of our clients at the heart of everything we do. We work with both businesses and private individuals, giving them legal advice and support which is unique to them and their situation.
Because every scam is different, we know you'll need a tailor-made solution. We don’t believe in simply handing out one-size-fits-all solutions to problems. We will focus on your specific circumstances before working out the best and most cost-effective way of helping you achieve your aims.