FCA secures win in case against unauthorised FX firm Xcore

Maria Nikolova

The scheme lured at least £1 million from investors but only a small amount of the investors’ money was ever used for trading.

The UK Financial Conduct Authority (FCA) has managed to win a case targeting Xcore Capital Limited.

In response to an application by the FCA, the High Court, on May 14, 2019, declared that Xcore and Jonathan Chitty had operated an unauthorised investment scheme. The scheme lured at least £1 million from investors but only a small amount of the investors’ money was ever used for trading.

Consumers gave money to Xcore in return for a 6% annual return. They were misled to believe that Xcore would be trading their money on FX and equity markets. However, the bulk of this money was instead used to fund an office in Mayfair, brokers’ wages and Mr Chitty’s lifestyle. Mr Chitty’s personal spending included £102,000 on cryptocurrencies, £58,000 on luxury goods, £24,000 on a Rolex watch and £20,000 towards his wedding.

The Court Order declares that Xcore ran a deposit taking scheme without the necessary authorisation by the FCA, and that Jonathan Chitty was knowingly concerned in the scheme. It further requires Xcore and Mr Chitty to pay the FCA £917,231 which is the full value of all outstanding sums owed to consumers. The FCA will distribute to consumers any funds it is able to recover from Xcore and Mr Chitty.

In November 2018, following an application by the FCA, a Judge in the High Court had previously imposed a freezing order on Xcore and Jonathan Chitty’s assets, and ordered to stop selling investments regulated by the FCA. This order remains in place until further order of the Court.

Earlier this week, the FCA voiced its concerns about illicit cryptocurrency and FX investment schemes. Cryptoassests and Forex investment scams reports more than tripled last year to over 1,800. This compares to 530 reports in FY 2017/18. The average loss due to such scams reached £14,600 in FY 2018/19, whereas the total loss amounted to £27,366,127.

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