FSA wins High Court case against land banks

The Financial Services Authority (FSA) has secured a £32m victory against three land banks but warns that victims of their unlawful activities are unlikely to recoup their losses.

The High Court has ruled that James Kenneth Maynard, Countrywide Land Holdings and Plateau Development & Land ran a collective investment scheme without authorisation and sold plots of land unlawfully to UK consumers.

Maynard and Countrywide have been ordered to pay £31,896,194 to the regulator, while Plateau – which is now in liquidation – was instructed to pay £918,975. In addition, Wasim Minhas, the director of Plateau, has been told to pay £75,000 to the FSA while Maynard has been served with a bankruptcy order.

However, the FSA has failed to identify any assets that would allow “more than a small proportion” of these payments to be made and says it remains unclear how much will eventually be returned to the scheme’s investors.

Tracy McDermott, acting director of enforcement and financial crime at the FSA, comments: “We have to be realistic about the low probability of securing meaningful compensation for victims of these scams, but this is still an important victory.

“Proving that a land bank is operating a collective investment scheme – and should therefore be FSA authorised – is very complicated, so every success puts us in a stronger position to tackle other schemes.”