Victims of a boiler room scam are set to share £64,000 in redress after the Financial Services Authority (FSA) obtained a court order against a firm involved in the fraud.
At a case heard in the High Court in London, Mr Justice Peter Smith ruled that Monobank was complicit in offshore boiler rooms cold calling UK consumers and offering them shares in the firm.
Monobank, a UK incorporated firm, provided promotional literature stating that it was in the final stages of setting up a prepaid credit card service in the UK and Europe and had entered into commercial agreements to that effect.
However, the FSA found no evidence to suggest that any of this was true. Despite this, Monobank still managed to obtain a quotation on the Frankfurt Stock Exchange's First Quotation Board.
Boiler room operations selling the worthless shares included Ellis Capital Management, Fallon Brookes, Morgan Stern, Rothmans Capital and and International Consulting Services.
The FSA said it is hoping to secure more redress through future action, describing the current figure as an "interim payment".
Although the regulator is currently aware of 20 victims of the scam, it believes there may be others who have yet to contact the FSA and could be entitled to compensation.
Tracy McDermott, acting director of enforcement and financial crime at the FSA, said: "This is a good example of the FSA taking action against a company which was complicit in the promotion of its shares by boiler room fraudsters.
In this instance, we have been able to recover assets for the benefit of victims, but this isn't always the case. Normally, victims of share fraud don't get any of their money back.
"We will use the full range of our civil, criminal and regulatory powers to deal with boiler rooms."
The FSA first took action against Monobank in August 2011 when it took steps to freeze its assets by obtaining an injunction from the High Court.
Information for victims.
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