Following an investigation by the Insolvency Service, Stuart Carl Mudge has received a 12 year bankruptcy restriction for his involvement in operating a failed spread betting scheme dubbed “Churchgate Trading Syndicate” in 2012.
The investigation into Mr Mudge’s conduct commenced on the making of the bankruptcy order following a petition presented by the UK’s FCA.
The investigation uncovered that between June 2009 and February 2012, Mr Mudge solicited £8.5 million from investors for his unauthorised investment scheme. The complaint also charged Mudge with making several misleading representations to actual and prospective investors. Such misrepresentations included that he was exempt from the FCA’s registration requirement. He also failed to provide pool participants with required monthly account statements and annual reports.
What Does 2021 Hold for the Markets? HYCM CEO SpeaksGo to article >>
In addition, Mudge allegedly utilized promotional materials that showed trading returns based on hypothetical results, without including the required disclosure language. This included for example promising investors with ‘guaranteed’ returns of 15 percent every quarter and told their money would be used to trade spread bets.
In a settlement reached in September 2013, Mr. Mudge acknowledged he broke the law and was subsequently fined £7,010,000 as restitution to defrauded participants. But after he failed to pay any money to the FCA, Mr Mudge was made bankrupt on 9 December 2014.
Following his bankruptcy, the Official Receiver further investigated Mr Mudge’s conduct and in February 2017 and the County Court at Cardiff made a bankruptcy restrictions order against him for 12 years.
Mr Mudge’s period of bankruptcy restriction means that he cannot promote, manage, or be a director of a limited company until February 2029. Further restrictions include that he must disclose his status as a person subject to bankruptcy restrictions to a credit provider if he wishes to get credit of £500 or more.
Commenting on the bankruptcy restrictions order, Ken Beasley, Official Receiver at the Insolvency Service said: “This case is a prime example of the losses that can be incurred via an investment scheme that looks too good to be true. Investors lost over £7,000,000 and Mr Mudge will face severe financial restrictions lasting for 12 years.”