Victims of a £1m boiler room scam are to be paid back a fraction of their losses after the Financial Services Authority (FSA) secured a court order against the fraudsters behind it.
Sinaloa Gold and one of its directors, Glen Lawrence Hoover, a US resident, offered shares to the public through boiler room fraudsters, and were yesterday ordered by the High Court to pay back £1,097,092.11 to 79 victims.
However, only £127,000 is currently available to be repatriated.
Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: "The diligent work of our dedicated team tackling unauthorised businesses means that, in this case, victims will receive back some proportion of their losses.
"It should however serve as yet another reminder that dealing with unauthorised businesses carries a great deal of risk."
Between August and December 2010, members of the public were cold called with offers of shares in Sinaloa, a UK incorporated company.
They were told the company was raising funds to develop a gold mine in the Sinaloa region of Mexico, although the FSA found no evidence that this was in fact the case.
Up to 90% of the money raised from consumers was then paid to the boiler rooms and to persons associated with Hoover.
In December 2010, shortly after becoming aware of the scam, the FSA obtained an injunction and freezing order against Sinaloa and Hoover securing £127,000.
Marcus Brookes appointed CIO
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