Defendants Samuel Golding, Shantelle Golding, Digital Wealth Limited and Outsourcing Express Limited will pay out after raising the cash initially through unauthorised investment schemes operated by them.
The schemes purported to involve the online purchase of wholesale goods from China for onward sale and promised unrealistically high returns, in some cases up to 100% of the amount invested.
In fact, the schemes were an unauthorised collective investment scheme and illegal deposit-taking, in contravention of the Financial Services & Markets Act 2000.
No significant trading was conducted and the schemes relied on a continuous flow of new investors to fund existing investors’ returns.
Samuel and Shantelle Golding admitted to the Court they were personally involved in these contraventions.
The schemes raised just over £15m from over 1,000 individual accounts.
The FCA took urgent enforcement action to stop it and prevent the disposal of the remaining funds.
Of the £15m that was raised, £9.25m was paid out to investors as returns and the defendants spent about £2.7m, including “significant sums” on travel, hotels and retail goods.
The court order confirmed that Mr and Mrs Golding will pay all funds held by them to the FCA for distribution to investors.
As a result of the action, the FCA will take control of approximately £3.4m which will be distributed to affected consumers, leaving them with a loss totalling at least £2.7m.
Mark Steward, executive director of enforcement and market oversight at the regulator, said: “The FCA took action as soon as it became aware of this illegal scheme, preventing further losses to future investors who would be unable to exit the scheme before it inevitably collapsed.
“The FCA again reminds consumers not to invest in schemes being offered by firms that are not authorised by the FCA and that look too good to be true, like these ones.
“In this case, we managed to save some money for investors: too often it is too late.”
The FCA will write to all investors about what steps need to be taken in the distribution process.