The Financial Conduct Authority is taking an unauthorised investment firm to the high court as it alleges the company acted illegally.
According to the regulator, Argento Wealth and its director Daniel Willis “unlawfully” took around £2.8m ($3.3m, €3.1m) as deposits under loan agreements and/or as part of an unauthorised collective investment scheme.
Additionally, the company is believed to have illegally arranged investments totalling approximately $9m (£7.4m, €8.3m) in a suspended Cayman Islands-based strategy called EMB Fund and breached restrictions on financial promotions.
The FCA said that Willis was “knowingly concerned” in the illegal activity.
Both the director and the company have failed to produce evidence that they can pay back the funds borrowed from retail investors and EMB plus interest, making Argento Wealth insolvent.
As a result, the regulator has frozen both the firm’s and Willis’ remaining assets in a bid to protect investors, as it seeks final orders to compensate 13 lenders who gave money to the investment company as well as the victims of its unlawful promotion.
The FCA warned that investors will likely suffer “very significant” losses, since Argento’s remaining assets “appear to be far below what would be required to return all investors’ money”.
A date for the restitution order at the high court is yet to be set.
Waiting on an outcome
A statement on the EMB Fund website, dated 14 October, confirmed that it had become aware on 1 July that the FCA had issued a claim in the high court against Argento Wealth and Willis.
“The FCA claim included the return of all the fund’s investment (including capital and returns on capital) as well as amounts owed to several third parties, who are unconnected to the fund. In addition the FCA had also obtained a ‘freezing order’ over all the investee company’s bank accounts and those of its director.”
The statement continued: “In the circumstances, the fund believes that until the outcome of the FCA claim is known, then it would be more prudent to put the legal proceedings in the Cayman Islands ‘on hold’ and conserve the fund’s resources. Accordingly, subscribers to the fund will henceforth be updated on an ‘as and when basis’.”
