POCA success for the FCA
Andrew Oldland QC and Katharine Everett consider the FCA's recent success using confiscation orders and how this compares to other prosecutors
Last week, Southwark Crown Court ordered the return of over £2.5m to investors who had invested in a fraudulent collective investment scheme (CIS).
Alex Hope had pleaded guilty to operating a collective investment scheme without authorisation in April 2014, and was convicted of fraud by a jury in January 2015. In addition to his prison sentences, he is also the subject of a Proceeds of Crime Act 2002 (POCA) confiscation order and will face a further prison sentence if he fails to pay within three months.
The court directed that all sums confiscated from Mr Hope and his co-defendant, Mr Von Badlo, be paid by way of compensation to the investors who were defrauded. In total, the FCA expects investors to receive approximately 55% (over £2.9m) of the capital sums that are owed.
The FCA (and the FSA before it) has now obtained confiscation orders exceeding £11m, and as at 12 February 2016, the FCA reported that its "collection rate" under the orders exceeded 96% of the sums due. Such a high rate stands out against the commonly low collection rates realised by other prosecutors.
The FCA's press release describes other recent successful cases, all of which relate to unlawful collective investment schemes or insider dealing.