‘Kube Trading’ allegedly received around £2.67 million for FX trading and concealed significant losses from investors.
The Financial Conduct Authority (FCA) has sued Lee Steven Maggs of Sittingbourne, Kent, for two counts of fraud and one count of breaching the Financial Services and Markets Act 2000 (FSMA). The three counts are as follows:
- Carrying on regulated activity (namely managing investments) whilst unauthorised, contrary to section 19 and section 23 of the Financial Services and Markets Act 2000.
- Fraud by abuse of position, contrary to section 1 and section 4 of the Fraud Act 2006.
- Fraud by false representation, contrary to section 1 and section 2 of the Fraud Act 2006.
Offences under section 1 of the Fraud Act 2006 carry a maximum sentence of 10 years’ imprisonment. Additionally, operating an unauthorized regulated activity carries a maximum sentence of 2 years’ imprisonment.
Kube Trading received around £2.67 million from investors
The criminal proceedings issued by the UK’s financial watchdog alleges that Steven Maggs operated an unauthorized investment scheme called ‘Kube Trading’ which received around £2.67 million from investors between 1 March 2019 and 22 January 2021.
The scheme involved trading contracts for differences in foreign exchange (FX), which is a regulated activity, and that Steven Maggs concealed significant losses from investors, the regulator stated.
According to the FCA, Lee Steven Maggs defrauded investors by misrepresenting how the scheme was operated and over the handling of investor funds.
Lee Steven Maggs appeared at Maidstone Magistrates’ Court on 23 April 2024. The case was sent to Maidstone Crown Court for a plea and trial preparation hearing on 21 May 2024.
FCA wants to expedite enforcement cases
Earlier this year, the FCA announced its plan to expedite enforcement cases as part of an effort to enhance the deterrent effect of its actions. The UK financial watchdog wants to concentrate on a selected portfolio of cases that align with its strategic priorities and promise the most significant impact. It also aims to close cases more quickly when it becomes clear that no outcome is achievable.
The plan includes publishing updates on investigations and being open about cases closed without enforcement action. This approach marks a departure from the existing procedure, where investigations are disclosed in very limited situations.
The FCA clarified that the decision to announce an investigation will be made on a case-by-case basis, considering a variety of factors to determine if doing so is in the public interest. These factors include the potential to protect and enhance the integrity of the UK financial system, reassure the public of the FCA’s actions, or aid in investigations.
However, announcing an investigation does not imply that the FCA has concluded misconduct or breaches of its requirements have occurred, especially in investigations concerning individuals, which are generally not announced.
