FSA continues crackdown on landbanking
The FSA has secured a summary judgment in the High Court against Stephen Watkins, who traded as Consolidated Land UK, for illegally selling land to UK consumers.
The judgment, which was handed down by the court without a full trial, orders Watkins to make an interim repayment of £920,000 to his victims via the FSA. Watkins has also been banned for life from selling plots of land.
Watkins sold plots of agricultural UK land, much of which was subject to planning restrictions, for over £11m and made a significant profit. He was stopped by an initial injunction obtained by the FSA in 2010.
Watkins’s customers were told by his sales staff that he would seek planning permission for them and also help them to re-sell the land at a profit. The FSA says Watkins had no intention of seeking permission or helping his purchasers, many of whom paid him their life savings.
The FSA does not regulate the sale of land but land banking amounts to collective investment, something that requires FSA authorisation. Watkins was never authorised by the FSA so his land sales were illegal.
Tracey McDermot, the acting director of enforcement and financial crime at the FSA, says: “This judgment was the result of a lengthy FSA investigation involving over a year of litigation against Watkins. We would like to thank the people who came forward to help us with our investigation. Their co-operation and evidence were invaluable and played a key role in this decision.
“Anyone thinking of conducting financial services without FSA authorisation should take note. As this and many other recent and ongoing cases show, the FSA is not afraid to mount complex court proceedings, both criminal and civil, to protect consumers and seek redress from unauthorised persons.”
The FSA has advised consumers that if they are sold land as an investment on the basis that someone else will manage it for them, they should seek the advice from an IFA.
The FSA first took High Court action against a land banking firm – UK Land Investments Limited – in 2008 and most recently obtained a High Court winding-up order against Plott UK Limited, another land banking operation, on June 8, 2011.
The regulator is pursuing six other High Court cases against other land banking operations and is investigating several more.
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