A broker has been sentenced to two years in prison and disqualified from being a director for six years, following the FSA’s discovery of a boiler room fraud.
David Mason, 29, of Southend-On-Sea, Essex, who conned investors out of £269,000, pleaded guilty to thirteen counts of carrying on a regulated activity without authorisation, one count of making false or misleading statements, promises or forecasts, and three counts of money laundering. David Mason persuaded the victims to hand over money for shares which he then used to pay unauthorised salesmen to push more shares into the company, which was never even floated. According to the London Evening Standard, Mason wrote letters to his victims under a fake name, assuring them that their money was safe. This is the first boiler room fraud case uncovered by the FSA which has resulted in a criminal conviction. Although these unscrupulous firms are breaking the law by conning would-be investors into buying shares, which are either worthless or non-existent, they usually operate outside of the UK which throws conviction out of the question. The sentencing Judge, HHJ Rivlin QC said: “I am satisfied that without your involvement this scheme could never have operated...I do believe the arrangements made by you were sophisticated...You caused distress, worry, frustration and in some cases serious disruption...You acted with blantant and I would say ruthless dishonesty which was thoroughly reprehensible.” Tracey McDermott, Director of Enforcement and Financial Crime at the FSA, said: “This prosecution must be seen as part of the development of our strategy in the fight against the major menace to the public posed by boiler rooms. “Mason was at the heart of a sophisticated boiler room scam and without his involvement the deals could not have been completed and the proceeds laundered. Like all boiler room fraudsters, Mason was dishonest and posed a very serious threat to honest investors. “This sentence sends a clear message that the court takes boiler room offences seriously and will hand down significant sentences to those involved in them. We will continue to crack down on all types of unauthorised business, such as boiler rooms, and seek the severest penalties where possible.” David Sinclair, the accountant who Mason employed to initiate the business has been forced to fully reimburse the victims. This case is unusual in that the FSA has managed to secure full compensation for all investors, as in the majority of cases investors lose all of their money.Manchester debt firm is liquidated owing creditors over £2.2m
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