22 October 2004

On 21 October, on a summary judgment application in proceedings brought by the Financial Services Authority, the High Court found that Sean Fradley (trading as Top Bet Placement Services) was in breach of the Financial Services & Markets Act 2000 ("FSMA") by operating an unauthorised collective investment scheme and that Gary Woodward was knowingly concerned in this contravention.

The court found that the bet placement service operated by Mr Fradley, which involved collecting money from the public and placing bets on horse races on their behalf, was an unlawful collective investment scheme carried on in breach of the general prohibition against unauthorised regulated activities contained in Section 19 of FSMA. The court made permanent injunctions preventing Mr Fradley and Mr Woodward carrying on these activities and ordered that they should make restitution for loss caused to investors, the amount of which is to be decided at a later date.

The FSA, through its work on perimeter issues, aims to protect investors from losing money to unauthorised financial activity. Investors can check whether a firm is FSA authorised or not on the FSA Register.

 

Notes for editors

 

  • The case was heard by the High Court on 20 October 2004. The order was made by Mr John Martin QC, sitting as a deputy High Court judge.
  • 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.
  • Investors paid 147 Racing Ltd £97 a month for its service. The minimum betting stake required was £500.
  • The FSA previously took action in this case in August 2003.
  • 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.
  • The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.

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