Four Guilty In Relation To £1.4 Million Investment Scheme
In a criminal prosecution brought by the Financial Conduct Authority (FCA), Samrat Bhandari and Dr Muhammad Aleem Mirza have been found guilty for their roles in operating an investment scheme which led to more than 300 investors losing a total of just over £1.4 million.
A third defendant, Albene Mendy, was found not guilty. The trial at Southwark Crown Court lasted 49 days, with the jury’s verdicts being returned on 30 November 2017.
At an earlier hearing, two further defendants, brothers Michael and Paul Moore, pleaded guilty to offences in relation to the same scheme.
The four defendants will be sentenced between 19 and 20 December at Southwark Crown Court.
For periods between February 2009 and early 2014, brokers cold-called investors, many of whom were vulnerable, retired individuals, and mis-sold them shares in Symbiosis Healthcare Plc (“Symbiosis”). Symbiosis was set up by Aleem Mirza, a medical doctor, to provide “healthcare solutions”. Samrat Bhandari was a director of William Albert Securities Ltd (“WASL”), a UK company which acted as corporate advisors to Symbiosis and organised the selling of Symbiosis shares. Albene Mendy also worked for WASL. Michael and Paul Moore were brokers directly involved in selling shares in Symbiosis to investors.
Despite promises to investors of large profits, and extravagant claims about the investment opportunity through the operation and expansion of a network of medical clinics in Dubai and elsewhere, in reality the shares in the company were, in effect, worthless. The total value of investments made was around £1.4 million. Each of the four defendants played an instrumental role in the systematic and prolonged misleading of investors, helping to create a wholly misleading impression as to the value and prospects of Symbiosis. This was accomplished through misleading investors directly, on the phone, in correspondence, and in person, at Annual General Meetings, as well as through creating and publishing written statements and promotional material by or on behalf of Symbiosis.
Mark Steward, Director of Enforcement and Market Oversight at the FCA, said:
“Misleading financial promotions relating to investment schemes cause untold harm to consumers. The FCA is determined to ensure those who are involved in setting up and operating schemes like this one, without FCA authorisation, are identified and held to account to the fullest extent permitted by law. In due course confiscation proceedings will be commenced, with a view to securing as much compensation as possible for those who have suffered a loss as a result of this criminal conduct.”
The FCA was assisted in the investigation and prosecution by a number of other law enforcement and government agencies, including the City of London Police, as well as by a number of investors in the scheme.
- On 5 May 2017 Michael Moore and Paul Moore pleaded guilty to Count 1 (creating a false impression, contrary to section 397(3) of the Financial Services and Markets Act 2000 (FSMA)) and Count 2 (carrying on a regulated activity without authorisation, contrary to sections 19 and 23 FSMA); Michael Moore additionally pleaded guilty to Count 4 (creating a false or misleading impression, contrary to section 90 Financial Service Act 2012). Count 3 (contravening the restrictions on financial promotions, contrary to sections 21 and 25 FSMA) was ordered to lie on the file.
- Samrat Bhandari was convicted by a jury following a trial of Count 1 (creating a false impression), Count 2 (carrying on a regulated activity without authorisation) and Count 4 (creating a false or misleading impression). Count 3 (contravening the restrictions on financial promotions, contrary to section 25 FSMA) was ordered to lie on the file.
- Dr Muhammad Aleem Mirza was convicted by a jury following a trial of Count 1 (creating a false impression), Count 4 (creating a false or misleading impression) and Count 5 (publishing false or misleading statements, being a company director, contrary to section 19(1) Theft Act 1968).
- Albene Mendy was acquitted by a jury following a trial of Count 1 (creating a false impression), Count 2 (carrying on a regulated activity without authorisation) and Count 4 (creating a false or misleading impression). The jury were not asked to consider Count 3, and the Judge directed a not guilty verdict at the conclusion of the trial.
- Samrat Bhandari, Michael Moore, and Paul Moore were charged on 19 January 2016. Dr Muhammad Aleem Mirza and Albene Mendy were summonsed to attend the Magistrates’ Court on 24 March 2016. All defendants appeared at Southwark Crown Court on 19 April 2016 for a pre-trial preparation hearing.
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.