Chartered accountants fined and banned for assisting multi-million pound boiler room share scam
15th December 2010The Financial Services Authority (FSA) has today fined and banned chartered accountants Paolo Maranzana and Laurence Finger for Sedley Richard Laurence Voulters' (SRLV) involvement with a boiler room share scam.
Maranzana was fined GBP105,000 and has been banned from working in financial services. Finger was fined GBP35,000 and has been banned from being a Money Laundering Reporting Officer. SRLV, which was authorised by the FSA, was fined GBP163,140.
In May 2008 SRLV was instructed by Natrocell Shareholders Limited (NSL) to assist with a fund raising by receiving and dispersing money through its client bank accounts and providing company secretarial and registrar services through its sister company. Maranzana, was the relationship partner for NSL and Finger was SRLV's Money Laundering Reporting Officer.
To assist with the fundraising, NSL used the services of overseas entities to sell shares in NSL to investors. These entities were not authorised by the FSA, or in the countries where they were based. They were in fact share fraud operators, commonly known as "boiler rooms".
The boiler rooms contacted at least 1,262 potential investors. Some were subjected to high-pressure selling techniques to encourage them to buy shares. They paid over GBP2.5 million into bank accounts operated by SRLV and significant sums were subsequently paid out on the instructions of NSL as commission to various boiler rooms rather than going to NSL.
Without the involvement of firms like SRLV, boiler rooms would not be able to operate effectively. Despite warning signs of possible financial crime by the boiler rooms, Maranzana and SRLV continued the disbursement of monies to the boiler rooms and their associates.
Margaret Cole, managing director of enforcement and financial crime, said:
"Authorised firms and their employees have an important role to play in combating financial crime. This means that they cannot turn a blind eye when they see warning signs that their clients might be involved in financial crime. In this case, the failures by SRLV, Finger and Maranzana to carry out their responsibilities had an impact on consumers who have probably lost their money by investing through boiler rooms."
Maranzana and Finger agreed to settle at an early stage and therefore qualified for a 30% discount under the FSA's executive settlement procedures. Were it not for this discount Maranzana's fine would have been GBP150,000 and Finger's GBP50,000. SRLV also settled at an early stage and were it not for this discount, the FSA would have imposed a financial penalty of GBP229,140. The penalty also includes the disgorgement of GBP9,140 in fees generated by SRLV over the period of the activity.
The investigation was carried out with the close cooperation of the City of London Police Economic Crime Directorate.
