Property management firm wound up for targeting vulnerable investors

Property management firm wound up for targeting vulnerable investors




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A Merseyside property management firm thar pried on ‘inappropriate investors’  – including an 86 year old man – by misleading them into buying shares has been wound up following an investigation.

The High Court heard how European Property Management Ltd deliberately sought to con unsuspecting investors into buying shares in its company, which it claimed it would then invest in property across Europe.
 
The company’s official address was registered in Penny Lane in Liverpool and was run by Ian John Jenkinson, 43, before being handed over to the Official Receiver on February 11.
 
The firm alleged it would capitalise on cities being awarded the European Capital of Culture award – such as Liverpool was recently – claiming that property in these areas would become more valuable as a result of their Capital of Culture status.
 
Unauthorised by the FSA, the firm used Corporate Business Angel Ltd and at least ten other entities, to cold-call potential investors. Those involved in the scam would make misleading and exaggerated claims to encourage people into taking out shares.
 
Shares were offered to investors in two distinct tranches; a Private Placement Offer around March 2006 and an Entitlement Offer early in 2007.
 
The companies’ unscrupulous methods raised a total of £853,395 from private investors in the UK. From the sums raised, the company paid out commissions of £529,945 to the unauthorised entities, which amounted to 65% of funds raised, and as a consequence less than 30% of shareholders’ funds were used for purposes set out in the Company’s Information Memorandum.
 
Commenting on the case, investigator Scott Crighton said: “The sale of the company’s shares involved the use of high-pressure telephone selling methods aimed at unsophisticated investors so that those targeted did not have the option of getting independent advice as to the truth of the claims being made.  Companies using these methods are conducting serious misconduct which undermines public confidence in business.
 
“The action we have taken sends a clear message; companies that set out to mislead and defraud the public will be shut down.
 
“Everyone should be wary of get rich quick schemes and the old adage applies: if it seems too good to be true, then it probably is.”

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