The Financial Services Compensation Scheme has placed Foreign Currency Innovations Ltd under investigation.
Based in Essex the firm offered a range of brokerage services including contracts for differences, rolling spot currency contracts and spread bets.
CFDs are a high-risk investment product used to bet on the price of an asset.
According to the lifeboat scheme it has started accepting claims against the firm and is working with joint liquidators to understand whether there are likely to be any valid claims that would allow it to pay compensation.
Foreign Currency Innovations entered creditors’ voluntary liquidation on March 10 2023 with James Patchett of Turpin Baker Armstrong and Stephen Katz of Begbies Traynor appointed as joint liquidators.
According to the FCA register, the firm is in an insolvency process but still remains authorised.
The firm has traded under the names FCI Markets, FCI Capital Management and FCI.
Previous reporting on CFDs
In the past few months the Financial Conduct Authority has launched criminal proceedings or has charged individuals in regard to CFDs.
Last month (May 2024) the regulator launched criminal proceedings against Lee Steven Maggs for two counts of fraud and one count of breaking the Financial Services and Markets Act 2000.
The regulator alleged that Maggs from Sittingbourne in Kent, operated an unauthorised investment scheme called ‘Kube Trading’ which received around £2.67mn from investors between March 1 2019 and January 22 2021.
The regulator alleged the scheme involved trading contracts for differences in foreign exchange, which is a regulated activity, and that Maggs concealed significant losses from investors.
In April, the FCA charged three individuals with fraud for their alleged involvement in a high-risk trading scheme which targeted people’s pension savings.
Kristofer McGuire, Keither Williamson and Karla Walker were charged with multiple offences including fraud by false representation and fraudulent trading.
Many victims were allegedly encouraged to use their pensions to invest in contracts of difference which were then traded to generate large commissions for those running the scheme.
alina.khan@ft.com
