Alex Hope, the 25-year-old trader who famously spent £125,000 on a single bottle of champagne, was today convicted of fraud totalling more than £5.5m.
Hope had previously admitted operating a collective investment scheme without authorisation. The scam, which has been likened to a Ponzi scheme, claimed to make large returns for investors from the profits of his forex trading.
Between March 2011 and April 2012 he took more than £5m from investors, spending more than £2m on himself.
Hope offered investors returns of up to 100 per cent in just a few months. In reality, Hope’s trading was heavily loss-making. He lost more than £500,000 of the £650,000 held in his trading accounts.
Today at the Southwark Crown Court Judge Taylor found him guilty by a jury of one count of fraud.
The Financial Conduct Authority, which prosecuted Hope, said the conviction “demonstrates the FCA's commitment to achieveing our objectives of protecting consumers and enhancing the integrity of the financial system.”
Georgina Philippou, acting director of enforcement and market oversight at the FCA, added: “Using fraud and false promises, Hope took in those who trusted him to invest their money. He promised fantastic returns but, as is so often the case with unauthorised investment schemes, those who invested ended up with significant losses and the main beneficiary of the scheme was Hope himself.
"There is a reminder for consumers here that unauthorised investment schemes are often incredibly risky and if the promised investment returns seem too good to be true they most probably are.
Hope and co-defendent Raj Von Badlo, also known as Raj Shastri, will be sentenced on 16 January 2015. The FCA will instigate confiscation proceedings against both defendants.
Von Badlo had previously pleaded guilty to recklessly making false representations to investors and promoting a collective investment scheme without authorisation.