" McKendrick misled investors and then, in contempt of court, failed to comply with court orders requiring him to properly account for the losses."
The High Court has sentenced a director to six months imprisonment for contempt of court after he breached FCA injunctions by diverting funds and failing to disclose information about his assets.
Robert McKendrick was the main director and sole shareholder of unauthorised collective investment scheme African Land and was also involved in the unlawfully operated Capital Carbon Credits scheme in Sierra Leone.
The losses across the schemes in which McKendrick was involved exceed £15m. In March 2018, the Court gave Judgment in the FCA’s claim and ordered McKendrick to pay the losses to the FCA so they could be paid back to investors.
The FCA obtained freezing orders against McKendrick in 2013 and 2018 requiring him to disclose all his assets and preventing him from disposing of them.
In breach of the freezing orders, McKendrick appointed his wife to manage his portfolio of buy-to-let properties at a commission rate significantly higher than he had paid to his previous letting agents. He then diverted the rental income from these properties to his wife.
McKendrick has since been declared bankrupt.
In Court, McKendrick admitted his breaches of the freezing orders and the FCA will now try to recover as much money as possible for investors.
Justice Marcus Smith noted that Mr McKendrick had admitted, and apologised for the breaches but they were "many, varied and deliberate, and intended to thwart orders of the court".
The Court indicated that Mr McKendrick would have received a 12 month sentence "but for his admissions and his genuine attempt to remedy his failures".
Mark Steward, executive director of enforcement and market oversight at the FCA, said: "In this case, Mr McKendrick misled investors and then, in contempt of court, failed to comply with court orders requiring him to properly account for the losses. The FCA will ensure that defendants who mislead investors are held to account to the fullest extent possible."