The Financial Conduct Authority (FCA) has started high court proceedings against two individuals and a company that were allegedly linked to unauthorised collective investment schemes.
Robert Forster, Richard Tasker and Fortem Global promised to invest in care homes, to which investors have already lost around £30m ($39.5m, €33.3m), the UK regulator claims.
The FCA said it will seek injunctions and restitution for the victims through the legal proceedings.
Forster has given undertakings to the high court which freezes his assets worldwide until a judgment is given. He is also prohibited from promoting the investment scheme and from selling any investments in it.
According to the watchdog, the Ponzi-like schemes were established and operated by two of Forster’s companies – Qualia Care Development (QCD) and Qualia Care Properties (QCP).
Fortem Global was the promoter, and none of the marketing material used was approved by an authorised person, the FCA added.
QCD and QCP are currently in administration.
Ponzi operation
Before winding up, the two companies owned 13 care homes in the north east of England.
They claimed to sell investments in rooms in the care homes as well as in other three that were not owned by either QCD or QCP.
According to the regulator, around £50m was invested across the 16 properties since 2016.
But the FCA said that investors were given “a number of misleading statements”, regarding the financial suitability of the schemes – including returns of between 8% and 10% a year.
The UK watchdog alleged that there was “never any real prospect that the operation of the care homes could generate profits that could meet those returns”.
“Payments of this kind were only ever likely to be possible by taking money from later investors to pay the earlier investors – unsustainable characteristics which are present in Ponzi schemes.”
Restitution order
Before the two companies entered administration, however, Forster moved around £1.8m – virtually all of their funds – into a newly opened bank account in the name of Qualia Care Holdings, the FCA said.
The watchdog said: “The FCA also alleges that Forster was knowingly concerned in the activities of QCD, QCP and Fortem Global (FGL) and that Tasker, the sole director of FGL, is knowingly concerned in the activities of FGL.
“The FCA is seeking an injunction and a declaration from the high court that the defendants’ actions amounted to unauthorised activity and will seek a restitution order to return funds to consumers who were affected by these alleged breaches.”
