The Financial Conduct Authority (FCA) has received the judgment from The Court of Appeal hearing for Capital Alternatives and others which took place on 27 and 28 January 2015. The Court of Appeal has ruled that all four schemes were collective investment schemes. If the decision is not subject to further appeal by the Defendants, the FCA can proceed with any remaining aspects of the case which still need to be ruled on by the Court.
Background
The FCA launched legal action in July 2013 in respect of two investment schemes, promoted by Capital Alternatives and a number of other firms:
- African Land (also known as Agri Capital) which offered investments in rice farm harvests in Sierra Leone as run by African Land Limited.
- Reforestation Projects (also known as Capital Carbon Credits) which offered investments in carbon credits intended to be generated from land in Sierra Leone, Brazil and Australia and is run by Reforestation Projects Limited.
The defendants in the case had structured their schemes to try to avoid the need to be regulated by the FCA.
In February 2014, the High Court ruled that the schemes were collective investment schemes and were promoted and operated without authorisation from the Financial Conduct Authority. Therefore, they could not be lawfully operated by the defendants.
This decision was appealed by some of the Defendants and a hearing was scheduled with the Court of Appeal on 27 and 28 January 2015. This appeal was unsuccessful and the Court of Appeal ruled that all four schemes were collective investment schemes.
As the Court has ruled that these are collective investments schemes and they were operating unlawfully, it may order the defendants to pay compensation that can be passed on to the investors.
The FCA has explained to investors in each of the schemes that they do not need to take any action at this stage regarding the FCA’s case. At present, the previous undertakings and injunctions obtained by the FCA from July 2013 onwards remain in place. Further information will be provided to affected investors when it is available.
Copies of the judgment can be obtained from the Court of Appeal under case number A3/2014/0764:0764A;0766 and a link to the judgment will be placed on this page once it is available.
Further Information
- View the full list of defendants in this case.
- View the previous statement: FCA wins case against Capital Alternatives.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.