The winding up petition was granted even though there had been no complaints from the public and even though an investigation by the Serious Fraud Office had not led to any proceedings.
The company was set up on December 9th 2009 and began trading in February 2010. Its business was to find buyers for hard to sell shares in return for substantial fees.
Even though it had only just started trading, its website and brochures claimed that it was a unique company with years of research experience and with staff devoted to helping people with overseas shares. In fact, there were no staff except the owner himself.
It also stated that it did not need to be regulated under the Financial Services and Markets Act 2000 because it did not give advice, or buy or sell regulated investments.
The police were concerned about the company’s claims and filed a complaint to the Insolvency Service which then began proceedings to stop the company trading.
The court granted the petition. It held that the company’s website created a picture of an established company with years of experience and a wide range of contacts. This was designed to convince clients that they were in good hands.
However, the claims were a gross distortion of reality. It rejected the owner’s defence in which he said that, although the claims were inaccurate, he did intend to reach the stage where he had experienced staff and he had not meant to deceive.
The court held that the false claims were enough to wind up the company, but it was also the case that it had been carrying out regulated activities when it was not authorised to do so.
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