UK FCA charges three scammers over CFD trading pension fraud

Rick Steves

Many clients were encouraged to use their pensions to invest. The total known loss to victims is over £8 million.

The UK Financial Conduct Authority has sued three individuals for their alleged involvement in a high-risk trading scheme, which targeted people’s pension savings.

The regulator is charging Kristofer McGuire, Keith Williamson, and Karla Walker with multiple offenses, including fraud by false representation and fraudulent trading after they targeted victims by persuading them to invest in contracts for difference (CFDs).

FCA claims losses amount to £8 million

The FCA alleges that the defendants made false statements to a trading platform that their clients were professional investors. Instead, many were encouraged to use their pensions to invest which were then traded to generate large commissions for those running the scheme, with victims’ pension funds almost entirely lost. The total known loss to victims is over £8 million.

Contracts for difference (CFDs) products are high-risk derivatives, with the majority of retail users’ accounts losing money. According to the FCA, the figure is around 80%. CFDs are often highly leveraged, which means they use debt to try and amplify returns, which can result in investors losing more than they invested.

In the UK, the FCA has imposed restrictions on how CFDs and CFD-like options can be sold and marketed to retail customers. The FCA has been carrying out work to address consumer harm in the UK in this sector.

The FCA alleges that, between 1 January 2015 and 30 June 2017 Kristofer McGuire, Keith Williamson, and Karla Walker made untrue and misleading representations to a CFD trading platform that clients met the qualifying criteria for professional investors when in reality, they did not.

The defendants allegedly engaged in fraudulent trading using detrimental trading strategies when trading CFDs to generate excessive commissions at the expense of investors.

Between 1 April 2016 and 28 February 2023, Kristofer McGuire made further untrue and misleading representations to five individual investors to persuade them to invest their money through him and/or his firm K&K Consult LTD, the FCA added.

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