Investors launch legal battle over alleged £50m fund fraud run by Capital World Markets 

Victims of an alleged £50 million fund fraud have taken legal action in a bid to get their money back, according to The Times.

The class action sheds light on money flows from the CWM fund, which promised investors high rates of return through interest from banks in the Cayman Islands.

Read more on CWM: Latest on Forex firm CWM FX fraud investigations 

The fund was run by Capital World Markets, which was formed two years ago and won the right to become Chelsea football club’s ‘online forex trading partner’ at the start of the year. The Premier League champions have since dropped their association with the firm.

Earlier this year City of London police arrested 13 people in a raid on the firm’s headquarters in Heron Tower at part of its investigation into alleged fraud.

Read more: London police raid offices of Forex Broker firm 

According to The Times, the class action has 30 members and claims that the £50 million which was deposited in a CWM account with Cayman Islands-based bank DMS, only has £1.2 million left.

It is alleged investors only got only part of their expected return, with the rest of the money used for sponsorships within the CWM network of businesses and ‘private jets and general lifestyle expenditure’.

The legal action is being taken against DMS and is being led by tax adviser Tim Richardson, who has taken advice from David Quest QC. Documents are set to be filed in the Cayman Islands.

Richardson claims he lost a six figure sum from the scheme and the some of his fellow investors may have lost up to £2.5 million.

‘It is our legal team’s strong opinion that the banks that held the CWM Limited accounts are liable for the losses incurred by investors as they were not authorised accounts,’ the action, seen by The Times, stated.

Source: City Wire – Investors launch legal battle over alleged £50m fund fraud

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