The boss of an unauthorised investment scheme has been jailed for five years following the Financial Conduct Authority launching a criminal investigation against him in August 2018.
Mark Barry Starling was sentenced by Southwark Crown Court on 29 November for defrauding 24 investors of just under £3m ($3.8m, €3.4m).
Despite having never been authorised by the FCA to carry out any regulated activity, Starling claimed to run three investment funds between 2008 and 2017. Investments were secured from friends and acquaintances.
In sentencing, judge HHJ Bartle said that Starling had defrauded investors in an “appalling way”.
Bartle said that “not one word of what [Starling told investors] was true” and that he had consistently told “a pack of lies”.
The FCA has commenced confiscation proceedings against Starling and it is expected that the victims will get some limited compensation.
How the scam worked
Starling, who described himself as a proprietary futures trader, claimed to run three funds; the Pilot Dax Fund, the Shadow Dax Fund and the Pilot Eurostoxx Fund.
Although he does appear to have had some interest in these markets, there is little evidence that it was more than that.
He traded just £8,000 of the £3m invested with him, making a loss of £2,450. At least £1m was spent maintaining his own lifestyle.
Investors would sometimes request money, which Starling paid out of other victims’ investments in a bid to make it appear he was running a successful business; when he was, in fact, running a Ponzi scheme.
In order to cover his tracks and prolong the fraud, Starling resorted to forging documents and correspondence from brokerages, as well as bank statements.
He also registered domain names and created email addresses similar to a legitimate business and an entirely fictitious firm.
Bartle said that the forgeries were “sophisticated” and the whole scheme demonstrated the way that Starling had “abused a position of trust”.
Dishonest masquerade
Mark Steward, executive director of Enforcement and Market Oversight at the FCA, said: “Mr Starling was never authorised to carry on business as an investment manager or as a futures trader.
“His sophisticated and dishonest masquerade has caused substantial losses to innocent investors. The FCA is committed to ensuring that criminals who operate unauthorised investment schemes are brought to justice and our quick action here has prevented the losses from becoming much worse.”
