The proceedings name Robin Forster, Fortem Global Limited and Richard Tasker.
The watchdog alleges that the defendants carried out “unauthorised activity” in relation to the operation and/or promotion of unauthorised collective investment schemes (UCIS).
The legal action will seek injunctions and restitution for investors.
The defendants are accused of making a number of misleading statements to investors about the financial sustainability of the schemes. These included an unrealistic level of return of between 8% and 10% a year.
The FCA alleges that there was never any “real prospect” that the operation of the care homes could generate profits that could meet those returns. It said payments of this kind were only ever likely to be possible by taking money from later investors to pay earlier investors - unsustainable characteristics common in ‘Ponzi’ schemes.
Mr Forster has given undertakings to the court which have the effect of freezing his assets worldwide, pending judgment.
The undertakings also prohibit the promotion of the scheme, and prevent any further sales of investments in the scheme.
The FCA says the unauthorised schemes were established and operated by two of Mr Forster’s companies which are now in administration - Qualia Care Developments Limited (QCD) and Qualia Care Properties Limited (QCP).
Fortem Global Limited (FGL) was the main promoter of the schemes. None of the promotional material was approved by an authorised person, the FCA says.
QCD and QCP owned 13 care homes in the North East of England. They sold, or claimed to sell, investments in rooms in these homes, as well as in a further 3 homes which were not owned by either QCD or QCP.
A total of approximately £50m was invested across the homes since 2016.
Shortly before placing QCD and QCP into administration, Mr Forster moved £1.8m, substantially all of their funds, into a newly established bank account in the name of Qualia Care Holdings Limited (QCH), leaving QCD and QCP without any funds.
The FCA also alleges that Mr Forster was knowingly concerned in the activities of QCD, QCP and FGL and that Mr Tasker, the sole director of FGL, is knowingly concerned in the activities of FGL.
The FCA is seeking an injunction and a declaration from the High Court that the defendants’ actions amounted to unauthorised activity and will seek a restitution order to return funds to consumers who were affected by these alleged breaches.
The FCA says it is not bringing a claim against QCL and does not believe that its proceedings should have any impact on the operation of the care homes. The FCA has thank the Care Quality Commission (CQC) for ensuring residents of the homes continue to receive the care they need.