Citywealth News, November 2011 – Stephen Gilchrist article on conducting regulated business whilst unauthorised

Conducting regulated business whilst unauthorised

The case:

In June 2011, the FSA secured summary judgment in the High Court against Stephen Watkins who traded as Consolidated Land UK. He was represented by Saunders Law and the judgment confirmed that Watkins had sold land illegally to UK consumers by running a Collective Investment Scheme. He was ordered to make an interim repayment of lb920,000 to his victims. Watkins has now been banned for life from selling plots of land without authority from the FSA.

Points to consider:

"c What is a Collective Investment Scheme?

"c What can unauthorised providers of services do?

"c - and not do?

"c The consequences of breach

"c Civil and criminal penalties

The background:

Watkins sold plots of agricultural UK land, much of which was subject to planning restrictions, for over lb11 million and made a very significant profit. He was stopped by an initial injunction obtained by the FSA in 2010.

Watkins's customers were told by his sales staff that he would seek planning permission for them and also help them to re-sell the land at a profit - a business commonly called land banking. In fact, Watkins had no intention of seeking permission or helping his purchasers - many of whom paid him their life savings.

The FSA does not regulate the sale of land but land banking amounts to collective investment - something that requires FSA authorisation. Watkins was never authorised by the FSA so his land sales were illegal.


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