The UK High Court has wound up a so-called “recovery room” scam that attempted to lure investors that had been previously duped by a dodgy carbon credit seller, Britain’s Insolvency Service said on Thursday.

Portman Chandlers Limited, which was incorporated in Feb. 2014, was wound up by the court in January of this year in the public interest following an investigation by the Insolvency Service, the agency said in a release.

The investigation was launched after a tip-off from a 73-year old investor who been cold-called by Portman Chandlers. The investor had previously been the victim of a company called Global Neutral Ltd, which was ordered into liquidation in Dec. 2013 for mis-selling voluntary carbon credits and rare earth minerals following a separate investigation.

The investor was told by a Portman Chandlers representative that he was one of the “lucky ones” whose carbon credit investments were safe and had, in fact, gained in value. But the investor was told that they would need to stump up at least another £60,000 to buy an investment bond promising 12% per annum in order to be able to sell their existing VERs.

The investigation also found that Portman Chandlers’ had no presence at its registered office in London, and that the firm’s website lifted large portions of its content from another, unrelated global investment management firm’s site.

“Whoever is behind this particular company evidently intended to use it to the detriment of the public and it is important that the public is warned of this. This concern is substantiated by the uncontested evidence that the website is largely a copy of a very legitimate business and well-known global investment company,” the court’s registrar said.

While dozens of fraudulent UK-based carbon credit companies have been shut down by authorities in the past few years, Portman Chandlers is among the first of a growing number of firms marketing ‘recovery room’ services to be wound up by the UK High Court.

EXOTIC INVESTMENTS

Separately, the UK’s Court of Appeal has ruled that exotic investment schemes, for example those selling carbon credits, should face more scrutiny from financial regulator the FCA.

The appeal was launched by operators of such funds after the FCA won a case against Capital Alternatives and several other firms, which the FCA claimed were promoted and operated without its approval.

The operators had argued that under their funds each investor’s holding was managed separately, and thus the funds escaped FCA oversight as they did not qualify as collective investment schemes.

The FCA said it hopes to recover some of the money from the operators to compensate investors in the schemes.

news@carbon-pulse.com