Accountants forced to pay back £3.7m over banned scheme

Upton and Co Accountants, based in Wakefield, had promised investors high returns through investing in foreign exchange markets but an early intervention by the Financial Services Authority (FSA) put a stop to the scheme.

An investigation by the FSA, begun in February last year, found only limited foreign exchange trading took place and very little money was ever returned to investors.

Upton and Co, which has never been authorised by the FSA, had begun operating a collective investment scheme known as the "currency plan" six months before. About 390 investors had paid just over 5m into the scheme.

The FSA secured a High Court injunction in March last year to stop Upton and Co trading and freeze its assets. Earlier this year it reached an agreement with the firm, which is owned and controlled by Darren Upton, to pay compensation to investors.

A High Court ruling yesterday confirmed that 3.7m would be paid to investors on a pro-rata basis immediately, with further payments of 10,000 a month also due to be returned to them during the coming seven years.

FSA director of enforcement and financial crime Margaret Cole said: "This is a fantastic result. It is so rare for victims of unauthorised businesses to get any money back because normally the money is misappropriated and victims of unauthorised firms are not protected by the Financial Services Compensation Scheme.

"But as we intervened early in the scheme's life cycle we were able to recover a large proportion of the original amount. Normally the amount recovered – if any – is often just a few pence in the pound so securing this amount is a real coup.

"Operating a collective investment scheme is a serious business involving the management of a number of investments and requiring FSA authorisation.

"Upton had no business running one of these schemes and the firm risked millions of pounds of investors' money – something you'd expect a firm of accountants to know better."

Mr Upton did not respond to a request to comment. The Association of Chartered Certified Accountants confirmed it was carrying out an investigation into Mr Upton.