The Financial Conduct Authority today launched a legal action against the bosses of a £230 million Gatwick airport carpark investment company that collapsed leaving thousands of savers fearing huge losses.
Yesterday, the Evening Standard revealed that investors were suing Park First and its controversial founder Toby Whittaker for fraud and today the FCA launched a separate action alleging the scheme made “false and misleading statements” in its promises to potential investors.
A total of 4500 largely elderly investors put money into the scheme, many of whom also lost money with London Capital & Finance. A large number of investors used their self-invested personal pensions to buy the product, which involved buying car park spaces at Gatwick and Glasgow airports then leasing them back to the company.
The FCA's claim alleges Park First was an illegal “collective investment scheme”. Such products, where a group of investors put money into a pool, can only be operated by regulated firms, which Park First was not.
The FCA says the defendants promised investors could expect returns of 10% and 12% for their investments and “the defendants had no proper basis for these statements which were false and misleading.”
It added that the defendants also claimed the investments were being sold at a 25% discount, based on independent valuations. “However, the defendants were aware that the valuations were based on unrealistic returns,” it says.
In its court action, the FCA is demanding the defendants pay “a just sum” to the FCA so it can redistribute the money to victims.
It is suing Whittaker, director John Slater, Park First and numerous other connected firms.
The FCA had stopped the defendants marketing the schemes in 2016 but instead of forcing them to close, opted to allow Whittaker's team to stay in charge and offer investors the chance to redeem their investments or continue holding them in a different financial structure.
But the companies could not honour the promises made under that arrangement and four of them collapsed into administration in July this year. They are being administered by Smith & Williamson, the same company administering London Capital & Finance.
In a statement, the regulator said: “The FCA is concerned... that unless proceedings are brought, it will not be possible to ensure that the defendants take all the steps that they should to reduce investors’ losses.”
Investors have criticised the FCA for not taking more aggressive action in 2016, but the FCA says it was concerned winding up the companies then would make it less likely they would get any of their money back.
The separate investors' lawsuit is being brought by Soho law firm Trainer Shepherd Phillips Melin Haynes.