The United Kingdom announced on Monday that the High Court of Justice, Business and Property Courts in England and Wales has shut down online broker Scothop Limited, popularly known as Genesis11.ICC Judge Jones ordered the winding up of the firm on June 21, 2022, following a petition by the Secretary of State for Business, Energy and Industrial Strategy to restore and wind up the company.According to the Court, Genesis11 established itself as a regulated online broker although it was incorporated in 2019 as a serviced office provider.As an online broker, Genesis11 positioned itself as a firm able to trade different commodities on behalf of investors. Jones agreed that the Genesis11 “traded without commercial probity” and obtained funds from investors on a false and misleading basis.Okhiria, Chief Investigator for the Insolvency Service, further noted that Genesis11 misled investors by “illegitimately securing thousands of pounds whilst falsely claiming to be regulated.”The Insolvency Service, an executive agency of the Department for Business, Energy and Industrial Strategy, found that customers of Genesis 11 made significant losses in their investments.The Service said it launched a confidential enquiry into Genesis’ activities after it received complaints from investors.The TrickThe liquidation administrator in its investigations found that Genesis11 always showed investors increases in their investments in order to encourage further investment. “When investors attempted to withdraw their funds, they were either charged a substantial fee or their investments significantly reduced in value, the Service explained. “Scothop Limited would then cease contact with investors if they continued to remove funds or did not pay the fee,” it added.Furthermore, the Service found that while Genesis11 claimed to have kept investors’ funds in separate third party accounts, they were actually held in accounts of individuals who are not registered officers of the company.As a result of Genesis11’s unregulated business activities, at least seven investors lost at least £263,000, the Service disclosed.One investor lost almost £100,000, the Service said. The Court, therefore, appointed the Official Receiver of the Public Interest Unit of the Insolvency Service as the liquidator of the company. The Receiver has been tasked with recovering the asset of the company in order to compensate investors.Meanwhile, the liquidation administrator noted that individuals connected to or who are in charge of Genesis11’s affairs and management refused to engage with the Service during the course of its investigation.Also, Jones ruled that Genesis11 “acted with a lack of transparency”The judge observed that there was an absence of proper records to confirm “that investors’ funds had been used for a proper purpose or to establish what happened to any funds received.”Okhiria praised the court for taking cognizance of the severity of Genesis11’s action and shutting the broker down. The chief investigator noted that the step by the court will help to prevent other investors from losing their money too.“We hope this outcome serves as a warning to other rogue investment firms that we have the necessary powers to put a stop to unscrupulous misconduct,” Okhiria added.
This article was written by Solomon Oladipupo at www.financemagnates.com.
