Tuesday 4 May 2021 2:32 pm

FCA nears payout deal over Park First's £230m 'illegal investment scheme'

The City regulator is in talks with the people behind an investment scheme which has left savers facing losses.

The Financial Conduct Authority is reportedly in detailed talks with Toby Whittaker, who owns Park First, which the regulator has previously said was involved in an “illegal collective investment scheme”.

A potential deal, which could be close according to a report in The Times today, would end a years-long process and potentially see some money returned to investors.

Read more: Gina Miller calls for FCA chair’s resignation following ‘anti-consumer behaviour’

2019 proceedings

In 2019 the FCA started proceedings against Park First and senior managers, including Whittaker, as well as several other connected companies.

The authority was trying to get compensation for around 4,500 investors who had sunk £230m into the Park First scheme.

Park First offered investors a chance to invest in parking spaces around Gatwick and Glasgow airports for up to £25,000 a piece.

According to the FCA, the scheme was promoted with false or misleading statements. Potential investors were told that they could realistically expect to make returns of 10 per cent within just a couple of years of their investment. This could then rise to a 12 per cent return in years five and six.

Read more: FCA looks into high risk investment promotion amid Bitcoin boom and TikTok ‘finfluencer’ trend

The scheme suggested that the investments were up to a quarter more valuable than the price at which they were being sold.

“The defendants were aware that the valuations were based on unrealistic returns,” the FCA said in 2019.

This week the watchdog said: “In this complex case we have taken civil enforcement action alleging serious breaches of the Financial Services and Markets Act.”

“We are committed to ensuring that those running the firms account for their misconduct, including paying compensation to victims,” the FCA added.

Small time investors have been left reeling from several collapsed schemes in recent years, most notoriously those who invested in London Capital & Finance (LCF), which trapped cash belonging to more than 11,000 savers.

A report into the FCA’s handling of that case was highly critical of the authority and the Treasury has announced plans that would compensate the LCF investors.

Read more: Treasury minister ‘sorry’ for LCF minibond scandal and plans crackdown on online fraud

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