2 Years for Illegal investment scheme

In a case bought by the Financial Conduct Authority (“FCA”), Virdee was sentenced to 2 years in prison and ordered to carry out 300 hours unpaid community work. Virdee pleaded guilty to 4 charges relating to misleading consumers, fraud and, the illegal operation of an unauthorised investment scheme, which raked in over half a million pounds.

Virdee ran a company named Dynamic UK Trades Ltd and, between October 2015 and November 2017, he operated a deposit taking scheme without the required authorisation of the FCA. The FCA say he targeted family members and associates; in one instance he convinced an investor to hand over £192,500, of which he only used £10,000 as promised.

Virdee received a total of £600,000 in funds from investors, some of whom were guaranteed returns of up to 100%. He managed to convince victims he was a successful trader, when in reality he had unsuccessfully invested £457,119 and the remainder he was using to fund his own lifestyle. In sentencing Mr Virdee, the Judge agreed with the prosecution’s description that his trading over the two year period was ‘spectacularly unsuccessful’.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said: “The FCA’s prompt action nipped Mr Virdee’s fraud in the bud and stopped it becoming inevitably bigger, causing greater loss to a wider group of victims. The FCA reminds investors to beware of anyone who is not authorised to carry out the activities they are offering.”

Beware of Investment Fraud

The FCA issued warning this year to investors, urging them to check that investment opportunities are legitimate before they hand over their money. They say people over 55, are most at risk.

  • A fifth (22%) of over 55s and a third (32%) of over 75s believe they have been targeted by an investment scam in the last 3 years
  • Over half (55%) of those who have invested in financial products did so on their own, rather than making the decision with family
  • One in eight (14%) of over 55s spend little or no time researching financial investment products before handing over money, rising to a quarter (26%) of over 75s

On average, victims of investment fraud lost £32,000 each last year. Recent pension freedoms and low interest rates offering poor returns on savings are making over 55s an increasingly attractive target for fraudsters. The new research is part of the FCA’s ScamSmart campaign, helping to protect consumers from investment fraud. The campaign features an interactive tool, the FCA Warning List, that helps investors find out more about the risks associated with an investment, and check a list of firms the FCA knows are operating without its authorisation.

To avoid being a victim of investment fraud, the FCA advises consumers to, at the very least:

  1. Reject unsolicited contact about investments.
  2. Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid.
  3. Consider getting impartial advice before investing.

Mark Steward, Director of Enforcement, FCA, comments:

“Making a significant financial investment is an important decision – be prudent, do your homework and be especially on guard if contacted out of the blue by someone you don’t know.  Fraudsters are targeting our growing over 55 population because they are more likely to have money to invest. They may pressure you to make a quick decision or try to make you feel stupid for not taking up their bogus offers.

“No investment decision should be rushed. Be sceptical. Be suspicious. Ask questions and get answers you can verify. And remember, if you receive an unsolicited call about an investment opportunity that sounds too good to be true then it probably is. The best thing to do is hang up.”