On 30th January we reviewed the investment firm Braxton Knight and concluded that its offer of unregulated securities paying a fixed return of up to 80% per annum with “capital risk less than 5%” constituted a Ponzi scheme, and also that the firm was offering both financial promotions and financial advice without authorisation.
The day after we went to press, the Financial Conduct Authority issued a warning against investing in Braxton Knight, and Braxton Knight now appears on the FCA Register as an unauthorised firm, with a note that the FCA “strongly suggest you avoid dealing with unauthorised firms like this”.
Carrying on a regulated activity without advice is punishable by a sentence of up to two years’ in prison and/or a fine. Operating a Ponzi scheme is fraud, which carries further penalties. The FCA has not disclosed whether any criminal investigations are ongoing, but we would not expect them to.