FSA/PN/087/2003
22/08/2003

The Financial Services Authority (FSA) has acted to protect the betting community against an unauthorised collective investment scheme by obtaining an interim injunction from the High Court in London. The order prevents Sean Fradley, trading as Top Bet Placement Services (TBPS) and 147 Racing Ltd (147), from carrying on a racehorse tipping and betting placement service. Mr Fradley agreed to most of the order.

The betting service offered by Sean Fradley to his customers had the key elements of a collective investment scheme as his customers had no individual control over which bets were placed and their money was collectively managed. Collective investment schemes require authorisation by the FSA

Andrew Procter, Director of the FSAs Enforcement Division said:

"The investors in this scheme chose to take the risk of gambling on horses. The additional risks from investing through an unauthorised business are not always so clear but can be substantial. Thats why we sought this injunction."

Investors were told that there was no risk if they participated in the scheme as if they did not win at least ten times their stake they would get back 12 months worth of the fees paid to 147. The scheme involved TBPS placing bets on horses selected by 147. It seems that investors did not know when bets had been placed or on which horses they had been placed. The FSA believes that several hundred participants participated in the scheme. The fact that the bet placing happened automatically was what made it a collective investment scheme.

Investigations are continuing and the FSA would like to hear from any investor.

Surrey Trading Standards objected to the mailing for the betting service offered by 147 on 9 April this year. Further information can be found on Advertising Standards Authority website, www.asa.org.uk. by clicking on Adjudications, choosing the time period since 13 January 1999, then searching by advertiser name and clicking on the number 1.

Notes for editors

  1. The case was heard by the High Court on 21 August 2003. The order was made by Mr Justice Etherton.

  2. The central feature of collective investment schemes is that they provide for the collective holding, management and investment of a pool of assets. The earnings or gains from the investment of these assets are shared among investors. A typical example of such schemes is a unit trust.

  3. Investors paid 147 Racing Ltd 97 a month for its service. The minimum betting stake required was 500.

  4. A copy of the Advertising Standards Authority adjudication is available on request.

  5. 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; securing the appropriate degree of protection of consumers; and fighting financial crime.

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

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