Financial Conduct Authority v Forster & Ors [2023] EWHC 1973 (Ch) (28 July 2023)

Financial Conduct Authority v Forster & Ors [2023] EWHC 1973 (Ch) (28 July 2023)

The court found that the investments constituted collective investment schemes under s.235 FSMA 2000, as investors' returns were dependent on the pooled management and performance of the overall scheme, not individual property. The promotional materials contained false and misleading statements regarding ownership and sustainability, in breach of s.89 and 90 FSA 2012. Mr Forster was knowingly concerned in these contraventions, and his reliance on legal advice did not absolve him, as the advice was based on incomplete or inaccurate information. Mr Forster was personally enriched as a result of the contraventions.

Citation
[2023] EWHC 1973 (Ch)
Parties
Claimant: The Financial Conduct Authority; First Defendant: Robin Scott Forster; Second Defendant: Fortem Global Limited; Third Defendant: Richard Paul Tasker
Jurisdiction
England and Wales
Judgment Date
28 July 2023
Procedural Posture
Civil / Trial of Preliminary Issues
Outcome
Judgment for the claimant on all preliminary issues
Legal Topics
Collective Investment Schemes, Misrepresentation, Restitution, Ponzi Schemes, Personal Liability of Directors
Financial Services Law Commercial Law Insolvency Law Collective Investment Schemes Misrepresentation Restitution Ponzi Schemes Personal Liability of Directors

Case Brief

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Parties

The Financial Conduct Authority

Claimant

Robin Scott Forster

First Defendant

Fortem Global Limited

Second Defendant

Richard Paul Tasker

Third Defendant

Procedural Posture

Civil / Trial of Preliminary Issues

Legal Issues

  1. 1 Whether the investments constituted collective investment schemes under s.235 FSMA 2000
  2. 2 Whether the investments were promoted using false or misleading statements in breach of s.89 and 90 FSA 2012
  3. 3 Whether the first defendant was knowingly concerned in contraventions by the investment companies and/or the second defendant

Ratio Decidendi

The court found that the investments constituted collective investment schemes under s.235 FSMA 2000, as investors' returns were dependent on the pooled management and performance of the overall scheme, not individual property. The promotional materials contained false and misleading statements regarding ownership and sustainability, in breach of s.89 and 90 FSA 2012. Mr Forster was knowingly concerned in these contraventions, and his reliance on legal advice did not absolve him, as the advice was based on incomplete or inaccurate information. Mr Forster was personally enriched as a result of the contraventions.

Court Disposition

Judgment for the claimant on all preliminary issues

Orders

  • Declaration that the investments constituted unauthorised collective investment schemes
  • Declaration of contraventions of s.89 and 90 FSA 2012