FSA forces bankruptcy on unauthorised CIS mastermind

The Financial Services Authority (FSA) has forced bankruptcy upon a man who was behind a £4.8m unauthorised collective investment scheme (CIS), after he failed to pay money back to his investors.

Darren Upton ran the firm Upton & Co Accountants Ltd, which was not authorised by the FSA, and operated a (CIS) known as the ‘Currency Plan', promising investors high rates of return.

Over £4.8m was handed over by investors and was supposed to be used to invest in foreign exchange markets, although in reality there was limited trading and very little money was returned.

Last year, the FSA recovered £3.6m to hand back to investors and came to an arrangement with Upton to repay a further £840,000 in 84 monthly payments of £10,000 each.

However, Upton only made five payments, meaning the FSA was no longer bound by the agreement and it to begin bankruptcy proceedings against him.

He was made bankrupt at a hearing at Leeds County Court on 7 September following the service of a statutory demand seeking payment of £1,090,782 on 15 June.

Mr Upton had previously applied to set aside the statutory demand, although that was dismissed by the court also on 7 September.

The FSA said it will update investors about the effect of Upton's bankruptcy "in due course" and said the Official Receiver will be responsible for administering his affairs and dealing with his assets.

It added: "Our primary objective was to take action against Mr Upton that would maximise the return of any funds to investors in the most efficient and cost-effective way. Bankruptcy proceedings were intended to achieve this."