€77,000 returned to offshore boiler room victims
From Tax & Regulation Feb 20 2012 BY: Ray Clancy
, Contributor
, International Adviser
The UK’s financial watchdog has obtained a court order against a firm that used offshore boiler rooms to sell its shares, in a move that will see at least €77,000 ($101,000) paid back to victims.
Monobank, a UK-incorporated firm, had promotional literature stating that it was in the final stages of setting up a prepaid credit card service in the UK and Europe, and had entered into commercial agreements to that effect.
However, the Financial Services Authority (FSA) found no evidence to suggest that any of this was true. Despite this, Monobank managed to obtain a quotation on the Frankfurt Stock Exchange’s First Quotation Board.
At the High Court in London, Justice Peter Smith ruled that Monobank was complicit in offshore boiler rooms, with fraudsters cold-calling UK consumers and offering them shares in the firm.
Some of the boiler rooms selling the worthless shares were: Ellis Capital Management, Fallon Brookes, Morgan Stern, Rothmans Capital, and International Consulting Services.
The €77,000 represents an interim payment, and the FSA hopes to secure more through future actions. The FSA is aware of 20 victims of the Monobank scam but said it believes there may be others who have yet to contact the FSA and could be entitled to compensation.
Tracy McDermott, acting director of enforcement and financial crime at the FSA, pointed out that in this instance the watchdog has been able to recover assets, but usually victims of share fraud do not get any of their money back.