The Financial Services Authority (FSA) has secured summary Judgment in the High Court against Stephen Watkins who was shown to have sold land illegally to UK consumers. This is what is known as ‘land banking,’ and whilst the FSA does not regulate the sale of land per se, land banking falls under ‘collective investment,’ for which it is necessary to acquire prior authorisation from the FSA.
Watkins, who traded under Consolidated Land UK, has received a lifetime ban from selling plots of land from the regulating body and has been ordered to pay an interim repayment of £920, 000 to the FSA who will then pass this on to his victims.
Watkins made his fortune from selling plots of agricultural land in the UK that were subject to planning restrictions, making a profit of £11 million. He is reported to have told his customers that he would be able to get the necessary planning permission for them in addition to the service of helping them to re-sell the land and to make a profit. However, it now transpires that Watkins did not carry out this service for his customers and did not in fact help them at all. His practice was illegal because it was not authorised by the FSA.
The FSA’s acting director of enforcement and financial crime, Tracey McDermott, said:
“Yesterday’s judgment was the result of a lengthy FSA investigation involving over a year of litigation against Watkins. We would like to thank the people who came forward to help us with our investigation. Their cooperation and evidence were invaluable and played a key role in yesterday’s decision.
…Anybody investing in land should always have it independently valued to check its worth. Furthermore, if you are ever sold land as an investment, and on the basis that someone else will manage it for you as part of a wider site, you should seek the advice of an independent financial adviser authorised by the FSA.”
This is another example of how the FSA is taking a very firm stance on financial crime and will not shy away from taking both criminal and civil proceedings in order to enforce that. It was in 2008 that the FSA took its first High Court action against a land banking firm called UK Land Investments Limited and on 8 June 2011 the FSA secured a High Court winding up order against Plott UK Limited. The FSA has also secured injunctions in six other land banking operations and is pursuing all of these further in High Court actions.
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