Stuart Carl Mudge solicited more than £8.5 million from investors who put their money in the Churchgate Trading Syndicate.
The County Court at Cardiff has given a 12-year bankruptcy restriction to a man who run a failed £8.5 million spread betting scheme.
According to an announcement issued by the UK Insolvency Service today, Stuart Carl Mudge, had obtained more than £8.5 million from investors for the Churchgate Trading Syndicate. The fraudulent activities lasted between June 2009 and February 2012.
An investigation by a specialist team at the Insolvency Service found that investors were lured with promises of ‘guaranteed’ returns of 15% every quarter and were told their money would be used to trade spread bets. The Official Receiver’s investigation found that in addition to acting in breach of the Financial Services and Markets Act 2000, the capital and interest repaid to investors was paid out of the capital payments made by other investors. This gave the misleading impression that the trading syndicate was generating such returns through trading whereas, in reality, it suffered significant losses though spread betting.
The Financial Services Authority (FSA), the predecessor of the Financial Conduct Authority (FCA), secured interim injunctions against Mr Mudge in February 2012, freezing his assets and preventing him from operating the scheme further.
Under a settlement reached in September 2013, Mr Mudge acknowledged that by running the syndicate without the necessary FCA authorisation, he violated the law. After that, the High Court ordered him to pay £7.01 million to the FCA to distribute to the affected investors. Mr Mudge, however, was made bankrupt after failing to pay any money to the FCA. The FCA managed to provide some return to the investors but they have suffered significant losses.
Following his bankruptcy in December 2014, the Official Receiver further investigated Mr Mudge’s conduct – and this led to the imposition of the lengthy bankruptcy restriction.
Ken Beasley, Official Receiver at the Insolvency Service, commented:
This case is a prime example of the losses that can be incurred via an investment scheme that looks too good to be true.
Mark Stuart, executive director of enforcement and market oversight at the FCA, said:
Churchgate is one of several unauthorised spread betting schemes we’ve investigated where investors have lost large amounts of money. Spread betting on shares and currencies can be very risky, and it is illegal for someone to trade them in this way on behalf of investors without FCA approval.
The legal ruling means that Mr Mudge 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 over £500;
- he may not act as an insolvency practitioner, or as the receiver or manager of the property of a company.