FCA Exposes Further Fake Clones of Financial Firms

Unauthorized firms continue to promote investments, ‎taking money from the general public, and regulators seem ‎powerless.

The Financial Conduct Authority (FCA) has issued multiple warnings to ‎investors advising them not to use the services of several clone/unregulated ‎investment firms.‎

The latest regulatory flurry includes asset managers and financial ‎brokers that appear to be soliciting and/or accepting funds ‎from UK residents without having obtained FCA ‎registration.‎

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The regulator warned against clone firm Marcel Miller, which is impersonating an FCA-authorized firm with the same brand name. Individuals in the UK have also been targeted by another clone operator, Padmar Investments Limited, drawing this latest warning. In this case, the named company has been using the details of STAR Capital Partnership LLP.

As per usual, this seems like yet another instance of a scam operation where an unlicensed ‎company illegally assumes the identity of an authorized company so that traders will mistake ‎it for the legitimate entity.‎

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The FCA warnings included contact details for each of the firms included and stressed that almost all companies who offer, promote or sell financial services or products in the UK have to be authorized by the regulator.

A fraud trend in the financial sector

Clone firms are not an unusual occurrence in the industry, as fraudsters have grown increasingly resourceful in recent years. A commonly adopted tactic is for scammers to advertise an illegal operation as a reputable brand or entity.

Clone firms also operate by mimicking legitimate company details to scam people into fake, non-tradable or worthless investments. Investors can protect themselves by being wary of any cold calls offering investment opportunities and being sure the check the company’s details on the FCA register.

According to the City watchdog, many of these entities are acting in a ‎capacity requiring them to be registered with the FCA. Registration allows ‎the agency to provide greater security and oversight of the industry by ‎examining whether firms meet minimum financial standards as well as ‎disclosure, reporting, and recordkeeping requirements.‎

Echoing previous warnings, the FCA, however, ignores that unauthorized brokers continue to promote unregulated investments, ‎taking money from the general public, and the regulator is ‎powerless to do anything.

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