FSA secures €77,000 redress for boiler room victims

17 February 2012 | By Gary Jackson

The regulator first took action against Monobank in August 2011, when it sought an injunction from the High Court to freeze its assets after investors were sold “worthless shares”.

Monobank created promotional literature stating that it was in the final stages of establishing a prepaid credit card service in the UK and Europe, despite there being no evidence this was the case.

The company entered into commercial agreements on the back of this claim and managed to gain a quotation on the Frankfurt Stock Exchange’s First Quotation Board.

London’s High Court has ruled that Monobank was complicit in offshore boiler rooms that cold-called UK consumers and offered them shares in the non-existent company. (article continues below)

The FSA is aware of 20 people who are affected by the scam but says there may be more who have yet to contact it.

The court also ruled that the victims will collect €77,000 in compensation. The FSA says this is an interim payment and hopes to secure further redress.

Tracy McDermott, acting director of enforcement and financial crime at the FSA, says: “This is a good example of the FSA taking action against a company which was complicit in the promotion of its shares by boiler room fraudsters.

“In this instance, we have been able to recover assets for the benefit of victims, but this isn’t always the case. Normally, victims of share fraud don’t get any of their money back.”

Some of the involved boiler rooms were Ellis Capital Management, Fallon Brookes, Morgan Stern, Rothmans Capital and International Consulting Services.

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