High Court closes bogus shares front firm
The High Court has taken decisive action against a scam UK firm which acted as a front for bogus overseas saving and investment companies.
The Inertia Partnership was wound up after the Financial Services Authority (FSA) petitioned judges to close the East Sussex-based firm.
Inertia scammed more than £1m from gullible investors who purchased shares from “boiler rooms”, unregulated and largely dishonest companies that specialise in this type of crime
The boiler rooms usually cold call their victims and persuade them that a fantastic UK investment opportunity is there for them. The shares will be worthless.
High Court judge Jonathan Crow QC said Inertia had played a significant role in the operation of the boiler rooms involved in the case, and that its participation in the scam as a UK-based firm was meant to reassure potential investors.
Jonathan Phelan, the FSA’s head of retail enforcement, said: “Investors were encouraged to take comfort in the fact that Inertia was based in the UK, so their UK investment was supposedly safe.
“In fact, it was transferring substantial sums of investors’ money to an unauthorised overseas organisation.”
He added: “Because Inertia was not authorised, investors do not have protection for the money they have paid over, such as access to the Financial Services Compensation Scheme or the Financial Ombudsman Service.”