The High Court today ordered four individuals and one company to pay nearly £3.62m in restitution to members of the public who bought shares that were promoted unlawfully.
Following an investigation by the Financial Conduct Authority (FCA), the Court ordered that:
- The directors of Our Price Records (OPR), Lee Skinner and Karen Ferreira, should pay £3,619,352 and £2,792,889 respectively in restitution for their roles in the unlawful promotion of OPR shares to the public. The Court also found that Mr Skinner was aware that OPR was making false or misleading statements and dishonestly concealing material facts in its promotional material.
- Marketing agents Clive Mongelard (aka Clive Harris), Tyrone Miller and Venor Associates Ltd (“Venor”), who operated under the name “Gemini”, are jointly and severally liable to pay £1,207,050 in restitution for their roles in the unlawful promotion of OPR shares and for arranging for investors to acquire shares in OPR without authorisation. The Court also found that Venor advised investors on the merits of acquiring shares in OPR without authorisation and made false or misleading statements to consumers. Mr Mongelard was found to be involved in these breaches.
- The FCA may not recover a total sum from all the Defendants greater than the total investor losses of £3,619,352.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
'Investors should stay clear of any unsolicited investment offers from unauthorised advisers or brokers. These businesses are breaking the law and will almost certainly lead to investment losses.
'The FCA is able to take punitive and remedial action in some cases but the best protection is to avoid these types of offers completely.'
OPR was a start-up company which promoted other companies’ products through its website for a commission. After initially failing to secure any investment from high net worth or sophisticated investors through an FCA authorised firm, OPR sought to raise funds from retail customers through two share offerings. OPR promoted them through unauthorised marketing agents who telephoned members of the public. The first share offering took place between October 2014 and March 2015 at 60p per share, and the second between March 2015 and November 2015 at £1 a share. A total of £3,619,352 was raised from 259 investors with individual investments ranging between £1,200 and £252,000.
The majority of the investors were introduced by Venor and Miller & Osbourne Associates Ltd (“M&O”). Mr Mongelard was the director of Venor and Mr Miller was the director of M&O, but they operated the businesses together under the name Gemini Asset Management.
The Court found that:
- Mr Skinner misled an accountancy practice into producing letters purporting to approve OPR’s financial promotions, despite the fact that unauthorised accountancy practices cannot approve financial promotions.
- OPR’s marketing materials contained misleading or false statements. They did not disclose that marketing agents received circa 50% commission on the gross amount raised on any sale of shares by them and that a large part of the remaining funds invested by shareholders was funnelled to Mr Skinner via two shell companies. It also did not disclose accurately the status of trademark proceedings that had been brought against OPR.
- Venor included false and misleading statements in the scripts it used during sales calls, including that OPR was a very fast-growing company, that Mr Skinner was a personal friend of Richard Branson and that the band Madness had agreed to appear for free in an advert for OPR.
M&O was dissolved on 6 August 2019.
OPR entered administration on 25 April 2017, when responsibility for the remaining funds passed to the administrators: Harrisons Business Recovery and Insolvency Limited.
Subject to any appeals that may arise from today’s decision, the FCA will take steps to recover monies from the Defendants, so that it can return them to the investors.