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12-year bankruptcy order for Gwent man who ran failed £8.5m spread betting scheme (26 April 2017)

Date: 26/04/2017
Duncan Lewis, Crime Solicitors, 12-year bankruptcy order for Gwent man who ran failed £8.5m spread betting scheme

A Cardiff man who ran a failed £8.5 million spread betting scheme has been prosecuted after an Insolvency Service investigation.

Stuart Carl Mudge, 61, from Newport in Gwent was given a 12-year bankruptcy order at Cardiff County Court, after an investigation found he had obtained more than £8.5m from investors for his failed spread betting scheme – the Churchgate Trading Syndicate – between June 2009 and February 2012.

Investigators from a specialist team at the Insolvency Service found that investors were promised “guaranteed” returns of 15% every quarter – and were told their money would be used to trade spread bets.

The Financial Conduct Authority (FCA) obtained interim injunctions against Mudge in February 2012, freezing his assets and preventing him from operating the syndicate.

In a settlement reached in September 2013, Mudge acknowledged that, by operating the syndicate without FCA authorisation, he broke the law. The High Court subsequently ordered him to pay £7,010,000 to the FCA to distribute to the Syndicate’s investors. However, Mudge was made bankrupt after failing to pay any money to the FCA.

Other sums recovered by the FCA funded a small pro-rata return to investors, who, the FCA says, have still suffered “substantial losses”.

Following Mudge’s bankruptcy on 9 December 2014, the Official Receiver further investigated his conduct – and on 3 February 2017, 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.

Commenting on the bankruptcy restrictions order, Official Receiver at the Insolvency Service, Ken Beasley, 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.

“Bankruptcy restrictions orders and undertakings are central to protecting not only the bankruptcy process, but the people and organisations owed money who suffer financially from irresponsible or unscrupulous behaviour.”

Executive director of enforcement and market oversight at the FCA, Mark Stuart, added:

“Investors are often lured by false promises of high returns without the high risks being disclosed to them. Spread betting on securities or currencies is typically risky – and investors in Mr Mudge’s scheme ended up losing substantial amounts of money.

“We urge investors to be vigilant and wary of anyone promising high or guaranteed returns – these are often the hallmarks of a scam, even if the trader is someone you know. And check with the FCA Register to ensure the person is authorised to be advising or trading on behalf of customers.”


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