FSA acts against Trident unauthorised business

The High Court in London has declared that Barcelona-based Fraser Lindhardt & Webb, trading as Trident Market Advisers (Trident), carried out unauthorised investment business in the UK, made misleading and false statements and issued investment advertisements without the required approval. The court made a permanent order requiring Trident to cease these activities. It also ordered investigations to be made with a view to Trident reimbursing its customers.

Trident used mailshots to attract UK customers interest and then offered them share dealing and investment advice services, although it was not authorised to undertake such business. FSA investigations found that Trident carried out 665 share trades during August to December 2000, but many customers did not actually receive their share certificates. These 665 trades were worth over 2 million. The precise value of Tridents assets still needs to be confirmed.

The court declared that Trident also deliberately misled its customers. In one case, a Trident customer visited Tridents offices at 60, Lombard Street, London and phoned up from reception to speak to a representative of Trident. When he asked to see a representative of Trident in person, he was told that the trading floor was busy and that therefore there was no-one free to see him. In fact, Trident did not have any trading floors in the UK and Tridents representative was speaking to his customer from Barcelona.

The courts declarations and orders were not opposed by Trident which did not attend the court hearing. The FSA will now investigate Tridents assets with a view to returning any available assets to investors who suffered a loss.

FSA Managing Director, Carol Sergeant who is responsible for Enforcement Action warns UK investors:

If you invest through a firm that is not authorised in the UK, you will not be protected by the UK regulatory regime. Trident was not authorised by the FSA nor by the Spanish authorities and therefore its customers will not be covered by any compensation scheme. The easiest way to check whether a firm is authorised in the UK is either to ring the FSA Consumer Helpline on 0300 500 5000 or go on to the FSAs website, www.fsa.gov.uk .

Notes for editors

1. The case against Trident was heard on 14 November 2001 in the High Court. The FSA stopped Tridents unauthorised business in December 2000. The press release detailing this was issued on 4 January 2001 and can be found on the FSAs website at www.fsa.gov.uk.
2. The court declared that Trident breached 3 sections of the Financial Services Act 1986. They are:
   • Section 3 - No person shall conduct investment business in the UK unless he is an authorised or exempted person. Contravention of section 3 of the Act is a criminal offence punishable by 6 months to 2 years in prison, a fine or both.
   • Section 47 - Any person who makes a statement, promise or forecast which he knows to be misleading, false or deceptive or dishonestly conceals any material facts; or recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence, if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person to enter or offer to enter into, or to refrain from entering or offering to enter into, an investment agreement or to refrain from exercising, any rights conferred by an investment. Contravention of section 47 is a criminal offence, punishable by 6 months to 7 years in prison, a fine, or both.
   • Section 57 - No person other than an authorised person shall issue or cause to be issued an investment advertisement in the UK unless its contents have been approved by an authorised person. Contravention of section 57 is a criminal offence, punishable by the same penalties as section 3.

   The court made its declaration and orders in a summary judgement. This occurs when the judge accepts there is no real defence to the claim. Contravention of the orders imposed by the court is contempt of court and can lead to imprisonment.

3. Fraser, Lindhardt & Webb Plc, the company trading as Trident Market Advisers is incorporated in the Seychelles. Tridents London offices were at: 60, Lombard St, London EC3V 9EA. The Barcelona offices of Trident were at: 288 Provenza, pral, Barcelona, 08008, Catalunya. Trident was not authorised to give financial advice or offer share dealing services in Spain.

4. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000; maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

5. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.