From: RegTech Analyst
The Financial Conduct Authority (FCA) has commenced legal proceedings against the men behind an alleged “unrealistic” and “unauthorised” care home investment scheme.
The City watchdog has commenced High Court proceedings against Robin Forster, Fortem Global Limited (FGL) and Richard Tasker, over alleged links to investments in care homes in which investors appear to have lost at least £30m.
The FCA claims that the three defendants have carried out “unauthorised activity in relation to the operation and/or promotion of collective investment schemes”.
The regulator said it will seek injunctions and restitution for investors.
According to the City watchdog, the scheme was operated by two of Forster’s companies which are currently in administration – Qualia Care Developments Limited (QCD) and Qualia Care Properties Limited (QCP). FGL was the main promoter of the schemes. None of the promotional material was approved by an authorised person, the FCA says.
Before they went bust, QCD and QCP owned a total of 13 care homes in the North East of England, according to the FCA.
The two companies allegedly sold or claimed to sell investment into rooms in these homes as well as in three homes not owned by either business. The FCA stated that roughly £50m has been invested across these homes since 2016.
However, the regulator claims that the in doing so, they made a “number of misleading statements and/or impressions were given to investors about the financial sustainability of the schemes. These included an unrealistic level of return of between 8% and 10% a year.”
The FCA claims that the care homes would never realistically be able to 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,” the City watchdog wrote in a statement.
The regulator added that Forster moved £1.8m, which the FCA said represented “substantially all of their funds” out of QCD and QCP before placing them into administration. The funds were said to have been transferred into a newly established bank account in the name of Qualia Care Holdings Limited.
The FCA also alleges that Forster was knowingly concerned in the activities of QCD, QCP and 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,” the City watchdog wrote.
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