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Investment Fraud Instigator receives 11 years imprisonment

17th September 2018

Sentenced passed on Investment Fraud Individual

Last week, five individuals were sentenced to a total of 17.5 years imprisonment for their roles in a £2.8 Million Investment Fraud, (see our previous news item).

Today, Mr Michael Nascimento, the controlling mind, instigator and main beneficiary of the investment fraud was sentenced for his part in the fraud and received 11 years’ imprisonment.

The investment fraud, carried out between 2010 and 2014 saw over 170 members of the public invest more than £2.8 million in shares in bogus companies, their money instead being used to fund the lifestyle of Mr Nascimento.

In one of the biggest fraud prosecution cases the FCA has ever undertaken, the result now sees the 6 individuals involved receiving a total of 28.5 years between them.

Mark Steward, the Executive Director of Enforcement and Market Oversight at the FCA, said of today’s sentencing:

“This brings to an end the FCA’s largest fraud prosecution which has seen the perpetrators imprisoned for a total of 28.5 years, affording justice to victims who were the subject of their calculated deception. We are continuing to fight for compensation for victims out of their assets.”

What can Firms take away from this?

Whilst many will read this news with interest and applaud the regulator for their prosecution, it might also be a good time for Firms to reflect upon their own businesses.  

Is enough being done to spot any fraudulent behaviour within your own businesses. Have individuals received sufficient training on Financial Crime and Market Abuse to feel confident they would be able to spot questionable patterns or fraudulent behaviour should they come across them in their everyday work.

Remember that the regulator is now able to apply a range of punishments and fine both individuals and firms. For example, in relation to Market Abuse failures the FCA can impose:

• Imprisonment;
• Unlimited Regulatory Fines for both firms and individuals;
• Withdrawal or variation of the firms authorisation; and
• Ban individuals from ever working in the financial services industry again

And of course, whilst a scandal might be caused by only one or two individuals, the resulting reputational damage may prove difficult for  the whole firm to recover from.

Firms are responsible for the competence of the staff they employ and it is vitally important that all members of staff are fully aware of their responsibilities and are up to date with regulatory changes and how each of these can impact on them and the firm.

In assessing the training needs for your staff and business, perhaps ask yourself if you understand the areas of your business that are at risk of fraud and if you are confident you know how to identify possible financial crime and fraud risks. If the answer to either of these questions is no then perhaps sourcing relevant staff training should be high on your firm’s agenda.

Who can help?

We consider training a cornerstone to a successful business. Our regulatory specialists and compliance consultants can assist in any training requirements you may have and are able to provide tailored training to your firm on a variety of topics including governance, financial crime and anti-money laundering. If you’d like to discuss your needs, please get in touch.

Read our latest articles, news and views affecting compliance and regulation in the UK Financial Services Industry.