Phillip Boakes gets 10-year prison sentence over FX Ponzi scheme

Phillip Boakes, who defrauded investors of more than £3.5 million, was today sentenced at Southwark Crown Court to 10 years in jail.

Boakes, who ran CurrencyTrader Ltd, a company engaged in Forex spread betting, lured investments using false instruments and taking deposits without having the proper authorization. In running a typical Ponzi scheme, Boakes funded the returns of existing investors via the deposits of the new ones. At the same time, he promised guaranteed returns at a rather high rate of 20%.

A big part of the sum misappropriated was used by Boakes to finance his luxurious lifestyle. An investigation by the Financial Conduct Authority (FCA) found he had spent £1.3 million to on cars and holidays abroad.

He used various means to disguise his fraudulent activities, including presenting himself as an FCA approved Independent Financial Adviser and a very successful trader. The FCA found that Boakes’ trading was loss-making: of the total £2.1 million traded by him, nearly £1 million was lost.

At court today the defendant pleaded guilty to several counts, including two counts of fraudulent trading and three counts of using a forged instrument. Last year he had already admitted his guilt for accepting deposits without authorisation.

Boakes was sentenced to four years for the first count of fraudulent trading and six years for the second count of fraudulent trading to run consecutively. He was sentenced to four years for each of the three offences of using false instruments and to one year for accepting deposits without FCA authorisation. The total is 10 years, as some of the sentences will run concurrently.

This is the longest total sentence imposed as a result of any FCA probe so far.

Commenting on the court’s ruling, Georgina Philippou, acting director of enforcement and market oversight at the FCA, said:

“We will not hesitate to take the strongest action to ensure that consumers are protected and individuals are held to account for actions that undermine the integrity of the financial services industry.”

The official announcement by the FCA can be read here.

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