LONDON, Nov 29 (Reuters) - A self-styled British trader, who conned financial experts and some of his closest friends out of millions of pounds in a nine-year investment scam, was sentenced by a London court to five years in jail on Thursday.
Mark Starling, 57, pleaded guilty to fraud and operating a collective investment scheme without authorisation in a case the Financial Conduct Authority (FCA), which led the prosecution, said was a warning to investors to stay alert and do research in the face of rising fraud.
Fraud costs Britain around 190 billion pounds per year, according to UK authorities.
The FCA said Starling told 24 investors, including an independent financial adviser and a stock broker, that he was making up to 18 percent profit per year on a low-risk trading strategy. They invested almost 3 million pounds.
But Starling only invested 8,000 pounds - and lost around 30 percent. The FCA said he spent the rest on a comfortable lifestyle, his daughter’s private education, holidays, rentals and an investor trip to a Le Mans car racing event in France.
Investors received glossy monthly fund statements showing the growth of their funds and were sometimes able to withdraw funds. But the FCA said Starling funded those payments from other victims’ investments.
The judge said Starling had defrauded investors in an “appalling way” and that “not one word of what (he told investors) was true.”
When the scheme collapsed, one investor said he had known Starling for over 35 years, that the families had taken holidays together and that his wife was godmother to one of Starling’s children.
“With the benefit of hindsight, I feel somewhat idiotic to have been taken in by him,” another told the FCA.
$1 = 0.7829 pounds Reporting by Kirstin Ridley; Editing by Toby Chopra