The FCA claims two investment programs – African Land and Reforestation Projects, also called Capital Carbon Credits – break financial rules.
Both schemes were promoted and sold by financial firm Capital Alternatives, the defendant in the case.
Lawyers for the FCA argue the schemes are collective investments that must seek FCA permission to operate in Britain.
The defence claims they are not collective investments, so have no need to comply with FCA regulation.
The FCA told the court that African Land dealt with investments based on rice harvests in Sierra Leone and Capital Carbon Credits, which invests in carbon credits generated from land in Sierra Leone, Brazil and Australia.
The FCA explained that if investors were getting a share of pooled payments from the land, then the investment breached guidelines as the farms were managed as one business.
The defence countered that investors only received returns based on the land that matched crop values on a plot of land they owned.
The court also heard the FCA claimed the investment was collective because construction, draining, roads, bridges, growing and irrigation were shared.
The defence also told the court that the scheme was intentionally set up to up to fall outside of the FCA’s regulatory regime.
The case continues.
The FCA has issued a cryptic statement confirming several firms trading in foreign exchange are under investigation – but has not named the firms or the nature of the inquiry.
“This is an early stage investigation and we expect the results will not emerge for some time,” said a spokesman. “We will not comment any further on this matter.”
Warnings about bogus advisers
The FCA has also issued two warnings about bogus firms posing as regulated financial advisers:
- Quinn & Voakes Capital
- Glover Capital Group
- Hoden International Clearing
- SKJ Capital Partners
- Whitney Cooper Associates
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.