High Court Steps In To Stop Property Scammers
Consumer watchdogs have stepped in to try and recover £880,000 investors handed over to suspected property fund scammers.
The Financial Conduct Authority requested the High Court to wind up Hermay Ltd as the fund was promoting investments without registering with the regulator.
The firm was promising investors a 51.5% return on land investments within 12 months. The FCA explained that 25 investors put cash into the scheme only to find the investment was a suspected fraud.
“A liquidator has been appointed to investigate Hermay’s activities,”
Said an FCA spokesman.
“The liquidator will contact affected investors to confirm if any money can be returned to them once this investigation is complete. “Our experience with this type of scheme is that consumers only receive back a small fraction of what they invested. “Unfortunately, these consumers will not have access to the Financial Services Compensation Scheme if they suffer losses as Hermay is not an FCA-authorised firm.”
The company was registered at Cornhill in the City of London. The FCA has also won an order from the High Court freezing the assets of another property investment firm allegedly running a scam. Brookbourne Trading was also operating as an investment adviser without authorisation.
“This company was accepting money without authorisation from us,”
Said the FCA spokesman.
“We believe around six investors have paid £200,000 into the firm. “In a separate High Court application, the bank account was frozen and an injunction was made forbidding the company to take any more deposits.”
The company’s registered address was at Bishopsgate in the City of London. Investors who gave cash to either company are not protected by the Financial Services Compensation Scheme and are unlikely to see the return of their money. The FCA also has a standing warning against land banking scams – when firms try to encourage investors to buy worthless land on the false promise that the value will soar in the future.
Go to the FCA website for more details about land banking scams
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