All that glitters may not be gold as firm wound up over mis-selling
Following an investigation by The Insolvency Service, London-based Caledonian Limited and Caledonian Commodities Limited were found guilty of mis-selling a number of products to the public, namely carbon credits, rare earth metals, coloured diamonds, storage pods and precious metals.
A five-day court hearing heard that investors were sold gold and silver via unallocated gold accounts they believed were under their name. Instead, the precious metals were bought by investors and then held in the name of Caledonian Limited.
Other investors were also told that if the company went into liquidation their investment would be safe as they believed they were buying physical gold, however this would not be the case.
During the trial it was established that Caledonian Ltd held approximately £62,204 of gold and silver, a substantial shortfall of the estimated £425,000 value that customers had invested. In essence the company had not purchased sufficient and/or sold precious metals that resulted in an unfunded precious metal account.
In his judgment, deputy judge Robin Dicker QC, stated: “In my view, the business of the companies has been conducted in a way which does not meet accepted minimum standards of commercial behavior.
“This is the case not merely in relation to the marketing and sale of carbon credits, rare earth metals and coloured diamonds, where the companies accept that investors were seriously misled, but, despite assertions to the contrary, also in the sale of precious metals. Such trading involved mis-selling which, in a number of respects, can only have been deliberate.”
David Hill, a chief investigator at The Insolvency Service, said: “The companies persuaded members of the public to part with substantial sums of money to invest in precious metals and a variety of alternative investments. At the end of the day nothing remained and the savings of members of the public had been lost.
“As so often is the case, if an investment scheme appears to be too good to be true, it probably is.”
If you’re thinking about investing in gold, see YourMoney.com’s Five mistakes to avoid when investing in gold.