Investigations by the UK government’s Insolvency Service have led to the so-called ‘recovery room’ companies being ordered into liquidation in the public interest.
The companies, five of which were connected, targeted individuals who previously purchased investments, such as carbon credits and rare earth metals, from other companies that had since been wound up.
Upfront fees
The recovery room companies promised ‘exit strategies’ where the investors could recover some, if not all, of their lost investment. However, substantial advance fees were required, although some were advertised as refundable.
One of the companies, Claremont Partnerships, falsely claimed that its guarantee was underwritten by Axa.
“These companies operated what were effectively scam boiler room operations that had no prospect of retrieving lost investments.”
Ordered into liquidation
The six companies were based in or around London’s square mile; boasting addresses such as Devonshire Square, Throgmorton Street, Old Broad Street, and Royal Exchange Avenue.
The companies, of which the first five were found to have some connection, were:
- Claremont Partnerships
- Brookepoint
- Brookcourt Trading
- Cotexx Trading
- Manor Trade
- Etonstanley
The five connected companies were in operation between March 2014 and approximately January 2015. They scammed at least £300,000 from investors.
Etonstanley was in operations from January 2014 until approximately March 2014 and resulted in at least £51,800 of losses to members of the public.
David Hill, chief investigator with the Insolvency Service, said: “These companies operated what were effectively scam boiler room operations that had no prospect of retrieving lost investments.”
