FCA Begins Proceedings against Individual over £1.3m Unauthorized Investment Scheme

<p>The British
<a href="https://www.financemagnates.com/terms/f/financial-conduct-authority-fca/">Financial Conduct Authority (FCA</a>) has initiated criminal proceedings against
Daniel Pugh, charging him with one count of fraud and three breaches of the
Financial Services and Markets Act 2000 (FSMA).</p><p>The
regulator alleges that between 1 March 2019 and 31 August 2020, Pugh defrauded
investors out of around £1.3 million through an unauthorized investment scheme
known as 'Imperial Investments Fund'.</p><p>FCA’s Allegations Against
Pugh</p><p>Specifically,
the <a href="https://www.financemagnates.com/tag/fca/" target="_blank" rel="follow">FCA </a>alleges that Pugh conspired to defraud by making numerous
misrepresentations about the interest rates offered, trading activity, and
profits from the scheme to potential investors. It is also alleged that Pugh
carried out regulated activities in the UK, including accepting deposits,
operating a collective investment scheme, and inducing people to invest. He offered
above-stated services without authorization from the FCA or qualifying as an
exempt person.</p><p>Pugh was
charged at Westminster Magistrates Court, and the case has been transferred to
Southwark Crown Court. The defendant is scheduled to appear there on 15 August
2023 for a plea and trial preparation hearing.</p><blockquote><p lang="en" dir="ltr">Mr Pugh has been charged with fraud and carrying out unauthorised activity. <a href="https://t.co/m9KBcbgdLY">https://t.co/m9KBcbgdLY</a></p>— Financial Conduct Authority (@TheFCA) <a href="https://twitter.com/TheFCA/status/1681622542111367170?ref_src=twsrc%5Etfw">July 19, 2023</a></blockquote><p>Legal Background</p><p>Conspiracy
to defraud is a common law offence with a maximum sentence of 10 years
imprisonment upon conviction.</p><p>Under
Section 19 of the FSMA, a person cannot engage in a regulated activity in the
UK unless they are authorized by the FCA or exempt. Breaching Section 19 of
FSMA is a criminal offence with a maximum sentence of two years imprisonment.</p><p>Under
Section 21 of the FSMA, a person must not communicate an invitation or
inducement to invest unless they are FCA authorized or an authorized person
approves the content of the communication. Breaching Section 21 of FSMA is also
a criminal offence with a maximum sentence of two years imprisonment.</p><p>FCA Divides and Conquers
on Many Fronts</p><p>The UK’s
regulator is prominent in Europe, frequently alerting the public to potentially
fraudulent investment firms and announcing significant financial penalties.</p><p>Recently,
the FCA levied <a href="https://www.financemagnates.com/forex/fca-imposes-fifth-penalty-for-cum-ex-trading-totaling-20m/" target="_blank" rel="follow">a substantial penalty of £2,452,700 on Bastion Capital London
Limited</a>. This consequence was due to considerable shortcomings in financial
control, specifically tied to cum-ex trading. The regulatory body found that
Bastion inadequately managed the risk of being exploited for fraudulent trading
and <a href="https://www.financemagnates.com/terms/m/money-laundering/">money laundering</a> activities.</p><p>Furthermore,
the FCA has been vigilant in spotting and impeding the operation of <a href="https://www.financemagnates.com/cryptocurrency/fca-shuts-down-26-illegal-crypto-atms-in-2023-continuing-its-6-year-fight/" target="_blank" rel="follow">unlawful
crypto ATMs throughout the UK</a>. Since the commencement of 2023, the regulator
has scrutinized 34 sites believed to harbor these devices. This effort, carried
out in collaboration with other law enforcement agencies, has successfully
disrupted 26 machines operating outside the law.</p><p><a href="https://www.financemagnates.com/forex/leader-of-36-million-boiler-room-scam-to-spend-additional-4-years-in-prison/" target="_blank" rel="follow">In an
earlier instance this year</a>, the FCA announced that the mastermind of a $3.6
million boiler room scam would face an additional four-year prison term. Sentenced
initially in 2018 to 11 years behind bars, the individual was further penalized
with an extra sentence due to non-payment of the confiscation order.</p>

This article was written by Damian Chmiel at www.financemagnates.com.