New regulator the Financial Conduct Authority has charged eight men with conspiracy to defraud in relation to a land banking scam dating back to 2008.
The ongoing “Operation Cotton”, initiated by the Financial Services Authority in 2008, has investigated three land banking companies, Plott UK, European Property Investments (EPI) and Stirling Alexander.
The former regulator managed to secure the compulsory closure of Plott UK and EPI in June 2011 and December 2012.
Under the latest proceedings brought by the new regulator, Scott Crawley, Daniel Forsyth, Ross Peters, Aaron Petrou, Ricky Mitchie, Adam Hawkins, Brendan Daley and Dale Walker have all been bailed to appear at the City of London Magistrates Court on 10 May.
In addition to fraud, Mr Walker, a solicitor, has also been charged with Money Laundering, while Mr Forsyth has also been charged with providing false information to the regulator.
The now-defunct FSA has investigated landbanking malpractice since 2008. The new FCA will now oversee the criminal proceedings.
The move is the latest crackdown by the City watchdog on manipulative schemes that have targeted large numbers of willing investors.
Land banking involves selling small plots of land to investors, often with promises of huge rises in value when it becomes available for development.
But the land is often situated on sites of outstanding natural beauty, which makes the likelihood of development very limited and renders the investment more-or-less worthless.
The FCA said it believed the three companies had reaped £5 million from UK investors since its investigation began in 2008.
Toughening Up
Martin Wheatley, the FCA’s chief executive (pictured top-right), said that the new regulatory structure would allow the FCA to get tougher with wayward investment companies.
His comments follow those of Andrew Bailey, chief executive of the new Prudential Regulation Authority (PRA) which now operates in tandem with the City watchdog.
To Mr Bailey, a previous “box-ticking" style of regulation which lacked accountability and clear objectives had persistently failed to act quickly or decisively enough over the last decade.
Keith McDonald
Which4U Editor
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