'Get rich quick' scheme operator made bankrupt
FSA/PN/077/2005
06 July 2005
The High Court has made a bankruptcy order against Mr Kevin Foster on a petition presented by the Financial Services Authority (FSA). Mr Foster ran the KF Concept (KFC), a 'get rich quick' money circulation scheme, into which approximately 8500 members of the public placed £36 million.
At the High Court in London, Mr Justice Lewison granted the order on Monday 4 July 2005 after Mr Foster admitted in court that he was both in breach of the Financial Services and Markets Act (FSMA) for running an unauthorised collective investment scheme and insolvent. Following the dismissal of his application for an order to stop the hearing of the FSA’s petition, Mr Foster confirmed to the Court that he would not oppose the bankruptcy order being made.
David Mayhew, acting Director of Enforcement at the FSA said:
"Mr Foster misled and continues to mislead his scheme's members on how their money has been spent. He took their savings with the promise of extravagantly high returns. He has not explained what happened to substantial sums but it is clear considerable amounts went to fund his lavish lifestyle and to make gifts to close associates.
"Because the members have invested in an unauthorised scheme, they do not have the protection of the Financial Services Compensation Scheme or the Financial Ombudsman. They have little hope of seeing the return of most of their money."
Members of the scheme are creditors of Mr Foster and can contact the Public Interest Unit at the Official Receivers Office, 21 Bloomsbury Street, London WC1B 3SS, by email on piu.or@insolvency.gsi.gov.uk or by telephone on 0207 637 6425 for further information. Creditors are requested to send their details to the Official Receivers Office as follows: full name and address together with amount of their individual claim in the bankruptcy.
The FSA first warned consumers of Mr Foster, of Doddington in Kent, and his activities in February 2004 when it obtained an interim injunction to restrain alleged unauthorised activities and freeze the assets of Mr Foster, Mrs Elaine Foster and Mr Kevin McNab.
The FSA's proceedings against Mrs Foster and Mr McNab continue.
Notes for editors
- 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 appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.