Adviser gets extra prison time for failing to repay investors

Added 27th September 2016

A financial adviser who funded a lavish lifestyle from investments in an unauthorised collective investment scheme has had an extra 603 days added to his prison sentence for failing to comply with a court order to repay investors.

Adviser gets extra prison time for failing to repay investors

The sentence was imposed by the Southwark Crown Court in London on Tuesday on the adviser Alex Hope. It is in addition to the seven years he is currently serving for defrauding investors out of £5.5m ($8m, €7.1m) using the investment scheme.

Over 100 investors had entrusted Hope with their money on the promise that their funds would be used to generate substantial returns by his trading on the foreign exchange markets. In reality only 12% of the total sum investors gave was ever traded and when Hope did trade, he lost almost all of the money in his trading accounts.

Lavish spending

Hope spent a significant proportion of the remainder of the funds on a lavish lifestyle, including spending £1m in a casino, over £200,000 on designer watches and shoes, £60,000 on travel, and over £600,000 in bars and nightclubs in London, Miami, and New York.

Under the Proceeds of Crime Act 2002, the value of tainted gifts can be recovered and Hope was ordered to repay £166,696 at a court hearing on 12 February 2016.

However, the Financial Conduct Authority (FCA) said that as of 27 September 2016: “Hope has paid just £1,000 in satisfaction of the order.”

“The FCA will continue to make sure wrongdoers do not profit from their crimes at the expense of victims. Confiscation orders cannot be ignored and will be enforced,” said Mark Steward, director of enforcement and market oversight.

Even after having served the sentence in default of payment, Hope will continue to be liable for the outstanding debt, the FCA said.

A separate order of £99,819 imposed against Hope’s co-defendant, Raj Von Badlo, who was originally sentenced to two year’s jail for the fraud, has been paid in full.

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Richard Hubbard

Group Editor

Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.


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