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The Financial Services Authority (FSA) has obtained a Court Order that Mr Aniz Kassamali Dhanji Manji will return £1m to investors and Mr Suresh Maganlal Bhowan will pay £17,233. These investors were victims of a share scam operated by overseas entities which sold shares to UK investors.
Mr Manji was the owner of Bayshore Nominees Limited (Bayshore) and Mr Bhowan was the sole director. Investors were encouraged to buy worthless shares during 'cold call' from unauthorised share sellers (boiler rooms) Gatemore Securities (Gatemore) and Enterprise Analytics Incorporated (Enterprise). Bayshore, which held the shares, sent out confirmation notes requiring payment from the investors and arranged the transfer of the shares to the investors. Bayshore then sent the money received from investors, first to other bank accounts, and then off-shore.
At a hearing held on 5 February 2009 at the High Court, the Honourable Mr Justice Floyd declared that Bayshore had broken the law by acting without authorisation, and that Mr Manji and Mr Bhowan had been knowingly concerned in this. It also declared that Gatemore and Enterprise had illegally promoted the shares. Bayshore, Mr Manji and Mr Bhowan agreed to the making of this Order.
Jonathan Phelan, head of retail enforcement at the FSA, said:
"We are pleased to have been able to secure the return of this money to consumers who invested with Bayshore. However, in most cases consumers will never see any of their money again. They should be careful to ensure that any firm they deal with is authorised, otherwise they stand to lose some or all of their investment."
Investors who have dealt with Bayshore should contact the FSA Consumer Contact Centre on 0845 606 1234 (referring to "Bayshore") with their details so they can be contacted in connection with any possible compensation.
Background
- Investors who dealt with Bayshore cannot claim compensation from the Financial Services Compensation Scheme or complain to the Financial Ombudsman Service as it was not authorised.
- The FSA receives and deals with an average of 5,000 consumer enquiries a year on share scam. Consumers can check whether a firm is authorised by the FSA, or if the firm calling is on the list of 500 known unauthorised firms which illegally target investors. The FSA works with a range of stakeholders including the City of London Police and international regulators to protect UK investors from share fraud.
- Anyone who has been cold called by companies offering to sell them shares can report this to the FSA by calling its consumer helpline 0845 606 1234 or by using the online form available on its consumer website.
- Share fraudsters target investors in several ways:
- High-pressure cold-calling to offer attractive share opportunities;
- Selling at inflated prices US 'Regulation S' shares which are banned for sale to US investors;
- Recovery room fraud - offering to buy shares, for an upfront commission, back from people who bought their initial shares from a share fraudster; and
- Threatening unspecified 'legal action' and freezing the assets of potential shareholders who decide not to purchase shares, forcing them to go through with the trade.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
