Financial Conduct
Beaufort Securities and Beaufort Asset Clearing
RNS Number : 4726G
Financial Conduct Authority
02 March 2018

Beaufort Securities Limited (BSL) and Beaufort Asset Clearing Services Limited (BACSL) are placed into insolvency

Following an urgent application by the Financial Conduct Authority (FCA), the High Court has appointed Messrs Russell Downs, Douglas Nigel Rackham and Dan Yoram Schwarzmann of PricewaterhouseCoopers (PwC) as joint administrators of BSL and joint special administrators of BACSL.

The FCA took this action following an assessment of the financial positions of BSL and BACSL (the Firms) which led the FCA to believe that both Firms are insolvent. The FCA also considers it necessary for insolvency practitioners to take over the running of the Firms in order to protect assets from dissipation and protect the customers of both Firms.

The FCA has also imposed requirements on the Firms, with immediate effect, using its own-initiative powers under the Financial Services and Markets Act 2000 (the Act), requiring the Firms to cease all regulatory activity and not to dispose of any firm or client assets without the FCA's consent.

The joint administrators / joint special administrators will contact all affected customers of the firms in due course. If customers of the Firms require more information about how they will be affected, they should contact PwC (contact details will be made available by PwC through the day).

You really could not make this one up.

THE PABLO PICASSO PAINTING “PERSONNAGES, PAINTED 11 APRIL 1965

Department of Justice, U.S. Attorney's Office, Eastern District of New
York

Friday, March 2, 2018

Six Individuals and Four Corporate Defendants Indicted In $50 Million
International Securities Fraud And Money Laundering Schemes

Defendants Proposed that Undercover Law Enforcement Agent Purchase a
Pablo Picasso Painting to Launder Fraudulent Profits From Stock
Manipulation Scheme

A multi-⁠count indictment was unsealed yesterday, in federal court in
Brooklyn, against Panayiotis Kyriacou, Arvinsingh Canaye, Adrian Baron,
Linda Bullock, Matthew Green, and Aristos Aristodemou; Beaufort
Securities Ltd ("Beaufort Securities"), a brokerage firm located in
London, United Kingdom; Beaufort Management Services Ltd ("Beaufort
Management"), an off-⁠shore management company located in Mauritius;
Loyal Bank Ltd ("Loyal Bank"), an off-⁠shore bank with offices in
Budapest, Hungary and Saint Vincent and the Grenadines; and Loyal Agency
and Trust Corp. ("Loyal Agency"), an off-⁠shore management company
located in Saint Vincent and the Grenadines.

The charges include conspiracy to commit securities fraud and money
laundering conspiracy. Canaye was arrested yesterday and is scheduled to
be arraigned this afternoon before United States Magistrate Judge Vera
M. Scanlon at the federal courthouse in Brooklyn.

Richard P. Donoghue, United States Attorney for the Eastern District of
New York, William F. Sweeney, Jr., Assistant Director-⁠in-⁠Charge, Federal
Bureau of Investigation, New York Field Office (FBI), and James D.
Robnett, Special Agent-⁠in-⁠Charge, Internal Revenue Service Criminal
Investigation, New York (IRS-⁠CI), announced the charges.

"As alleged in the indictment, the defendants engaged in an elaborate
multi-⁠year scheme to defraud the investing public of millions of dollars
through deceit and manipulative stock trading, and then worked to
launder the fraudulent proceeds through off-⁠shore bank accounts and the
art world, including the proposed purchase of a Picasso painting,"
stated United States Attorney Donoghue. "The charges announced today
reflect that this Office, together with our law enforcement partners, is
committed to holding accountable those who defraud investors, regardless
of the complex schemes they use to hide their ill-⁠gotten gains." Mr.
Donoghue thanked the U.S. Securities and Exchange Commission (SEC), both
the New York Regional Office and the Washington, D.C. Office, the City
of London Police, the U.K.'s Financial Conduct Authority and the
Hungarian National Bureau of Investigation for their significant
cooperation and assistance during the investigation.

"As alleged, in a series of unscrupulous and illegal trading practices,
the defendants contrived a scheme to defraud investors of U.S. publicly
traded companies by manipulating stock prices and masking the true
ownership of their clients' financial interests," stated Assistant
Director-⁠in-⁠Charge Sweeney. "In order to discreetly receive their
illegal proceeds, the defendants focused their efforts on laundering the
money through a variety of means, including the art world, which they
believed was a market free from direct regulation. Bringing to justice
securities fraudsters and money laundering facilitators who engage in
these types of schemes is and will remain a priority for the FBI and our
law enforcement partners worldwide."

"Since the Foreign Account Tax Compliance Act has been enacted, the
financial expertise of our criminal investigators is needed now more
than ever in this global economy," stated IRS-⁠CI Special Agent-⁠in-⁠Charge
Robnett. "These allegations outline an intricate scheme to obscure
beneficial ownership and launder illicit proceeds. This behavior harms
the financial world abroad and here at home."

Securities Fraud and Money Laundering Scheme

As alleged in the indictment, between March 2014 and February 2018,
Beaufort Securities, Beaufort Management, and managers Kyriacou and
Canaye, collectively the "Beaufort Defendants," together with their
co-⁠conspirators, engaged in a scheme to defraud investors and potential
investors in various U.S. publicly traded companies by concealing the
true ownership of various U.S. publicly traded companies and
manipulating the price and trading volume in the stocks of those
companies.

Beginning in or about October 2016, an Undercover Agent contacted
Kyriacou and stated that he was interested in opening brokerage accounts
at Beaufort Securities from which he could execute trades in several
multi-⁠million dollar stock manipulation deals.

In furtherance of the scheme, the Beaufort Defendants opened brokerage
accounts for their clients in the names of off-⁠shore shell companies
with nominee shareholders and directors, and then conducted manipulative
trading of stocks of U.S. publicly traded companies listed on U.S.
over-⁠the-⁠counter exchanges. Beaufort Securities facilitated at least ten
"pump and dump" schemes involving U.S. publicly traded stocks,
generating over $50 million in proceeds for its clients. Notably,
Beaufort Securities had affirmed to the Financial Conduct Authority
("FCA") in the United Kingdom in July 2016 that it had taken remedial
measures to correct deficiencies in the firm's financial crime controls
and anti-⁠money laundering processes.

Additionally, between January 2011 and February 2018, the Beaufort
Defendants; Loyal Bank; Loyal Agency; Baron, the Chief Business Officer
of Loyal Bank and a Director of Loyal Agency; and Bullock, the Chief
Executive Officer of Loyal Bank and a Director of Loyal Agency, together
with their co-⁠conspirators, devised and engaged in a scheme to launder
securities fraud proceeds for their clients. To facilitate this scheme,
Beaufort Securities transferred funds to corporate bank accounts at
Loyal Bank opened in the names of off-⁠shore shell companies that were
controlled by the bank's clients. Loyal Bank then provided debit cards
to its clients to withdraw funds from those accounts in an untraceable
manner to hide the source of the money and facilitate ongoing securities
fraud.

Money Laundering Through Purchase and Sale of Art

Separately, between October 2017 and February 2018, Kyriacou;
Aristodemou, the uncle of Kyriacou; and Green, the owner of an art
gallery in London, United Kingdom, together with their co-⁠conspirators,
agreed to launder £6.7 million, the equivalent of over $9 million
dollars, which the Undercover Agent represented to be the proceeds of
securities fraud. After initially proposing the use of real estate
investments to launder the funds, the co-⁠conspirators devised a scheme
to "clean up the money" through the purchase and subsequent sale of art.
Aristodemou described the art business as the "only market that is
unregulated," and that art was a profitable investment because of "money
laundering." The defendants proposed the Undercover Agent could purchase
from Green a painting by Pablo Picasso entitled "Personnages, Painted 11
April 1965," and provided paperwork for the painting's purchase. The
money laundering scheme was halted prior to the transfer of ownership of
the painting.

The FCA also took regulatory action yesterday against Beaufort
Securities and a related clearing firm, including halting all regulated
activities and initiating insolvency proceedings against both firms. The
SEC filed a civil complaint today against Beaufort Securities and
Kyriacou

The charges in the indictment are merely allegations, and the defendants
are presumed innocent unless and until proven guilty.

The Defendants:

PANAYIOTIS KYRIACOU, also known as "Peter Kyriacou" Age: 26 Residence:
London, England

ARVINSIGH CANAYE, also known as "Vinesh Canaye" Age: 30 Residence:
Mauritius

ADRIAN BARON Age: 63 Residence: Budapest, Hungary

LINDA BULLOCK Age: 57 Residence: St. Vincent/⁠Grenadines

ARISTOS ARISTODEMOU Age: 49 Residence: London, England

MATTHEW GREEN Age: 50 Residence: London, England

BEAUFORT SECURITIES LTD London, England

BEAUFORT MANAGEMENT SERVICES LTD Mauritius

LOYAL BANK LTD Budapest, Hungary and St. Vincent/⁠Grenadines

LOYAL AGENCY AND TRUST CORP. St. Vincent/⁠Grenadines

US Justice link to above story :
https://www.justice.gov/usao-edny/pr/six-individuals-and-four-corporate-defendants-indicted-50-million-international
[1]

US Justice to the above indictment:
https://www.justice.gov/usao-edny/press-release/file/1040471/download
[2]

THE UNDERCOVER FBI STING INDICTMENT FROM THE SEC:

Charges U.K. Brokerage Firm, Investment Manager, CEO, and Others for
Manipulative Trading in U.S. Microcap Stocks

Washington D.C., March 2, 2018 -⁠-⁠

The Securities and Exchange Commission today announced securities fraud
charges against a U.K.-⁠based broker-⁠dealer and its investment manager in
connection with manipulative trading in the securities of HD View 360
Inc., a U.S.-⁠based microcap issuer. The SEC also announced charges
against HD View's CEO, another individual, and three entities they
control for manipulating HD View's securities as well as the securities
of another microcap issuer, West Coast Ventures Group Corp. The SEC
further announced the institution of an order suspending trading in the
securities of HD View.

These charges arise in part from an undercover operation by the Federal
Bureau of Investigation, which also resulted in related criminal
prosecutions against these defendants by the Office of the United States
Attorney for the Eastern District of New York.

In a complaint filed in the U.S. District Court for the Eastern District
of New York, the SEC alleges that Beaufort Securities Ltd. and Peter
Kyriacou, an investment manager at Beaufort, manipulated the market for
HD View's common stock. The scheme involved an undercover FBI agent who
described his business as manipulating U.S. stocks through pump-⁠and-⁠dump
schemes. Kyriacou and the agent discussed depositing large blocks of
microcap stock in Beaufort accounts, driving up the price of the stock
through promotions, manipulating the stock's price and volume through
matched trades, and then selling the shares for a large profit.

The SEC's complaint against Beaufort and Kyriacou alleges that they:

opened brokerage accounts for the undercover agent in the names of
nominees in order to conceal his identity and his connection to the
anticipated trading activity in the accounts

suggested that the undercover agent could create the false appearance
that HD View's stock was liquid in advance of a pump-⁠and-⁠dump by
"gam[ing] the market" through matched trades

executed multiple purchase orders of HD View shares with the
understanding that Beaufort's client had arranged for an associate to
simultaneously offer an equivalent number of shares at the same price

A second complaint filed by the SEC in the U.S. District Court for the
Eastern District of New York alleges that in a series of recorded
telephone conversations with the undercover agent, HD View CEO Dennis
Mancino and William T. Hirschy agreed to manipulate HD View's common
stock by using the agent's network of brokers to generate fraudulent
retail demand for the stock in exchange for a kickback from the trading
proceeds. According to the complaint, the three men agreed that Mancino
and Hirschy would manipulate HD View stock to a higher price before
using the agent's brokers to liquidate their positions at an
artificially inflated price. The SEC's complaint also alleges that
Mancino and Hirschy executed a "test trade" on Jan. 31, 2018,
coordinated by the agent, consisting of a sell order placed by the
defendants filled by an opposing purchase order placed by a broker into
an account at Beaufort. Unbeknownst to Mancino and Hirschy, the Beaufort
account used for this trade was a nominal account that was opened and
funded by the agent. The SEC's complaint also alleges that, prior to
their contact with the undercover agent, Mancino and Hirschy manipulated
the market for HD View and for West Coast by using brokerage accounts
that they owned, controlled, or were associated with -⁠including TJM
Investments Inc., DJK Investments 10 Inc., WT Consulting Group LLC -⁠ to
effect manipulative "matched trades."

"We allege that Kyriacou engaged in a scheme to manipulate the market of
HD View stock by matching trades to create a false appearance of
liquidity for unwitting investors. The SEC and its law enforcement
partners will continue to aggressively work together to root out such
manipulation, wherever the alleged perpetrators and their brokerage
firms reside, and despite their best efforts to conceal and disguise
their methods," said Marc P. Berger, Regional Director of the SEC's New
York office.

"This action demonstrates that we will continue to be vigilant in
policing microcap markets and will continue to take action as
appropriate against those that undermine the integrity of the market
with manipulative practices, like matched trading, as alleged in our
complaint," said Antonia Chion, Associate Director of the SEC's
Enforcement Division.

The SEC's complaint against Beaufort and Kyriacou charges the defendants
with violating Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-⁠5 thereunder. The SEC also charged Hirschy, Mancino, and their
corporate entities with violating Section 17(a)(1) of the Securities Act
of 1933, Sections 9(a)(1), 9(a)(2), and 10(b) of the Exchange Act and
Rules 10b-⁠5(a) and (c) thereunder. The SEC is seeking injunctions,
disgorgement, prejudgment interest, penalties, and penny stock bars from
Beaufort and Kyriacou. With respect to Hirschy, Mancino, and their
corporate entities, the SEC is seeking injunctions, disgorgement,
prejudgment interest, penalties, penny stock bars, and an
officer-⁠and-⁠director bar against Mancino.

The investigation was conducted in the SEC's New York Regional Office by
Tejal Shah and Joseph Darragh, Lorraine Collazo, and Michael D. Paley of
the Microcap Fraud Task Force and supervised by Lara S. Mehraban, and in
Washington, D.C. by Patrick L. Feeney, Robert Nesbitt, and Kevin
Guerrero, and supervised by Antonia Chion. Preethi Krishnamurthy and Ms.
Shah will lead the SEC's litigation against Beaufort and Kyriacou. Ann
H. Petalas and Mr. Feeney, under the supervision of Cheryl Crumpton,
will handle the SEC's litigation against Mancino, Hirschy, and their
entities. The SEC appreciates the assistance of the Office of the United
States Attorney for the Eastern District of New York, the Federal Bureau
of Investigation, the Internal Revenue Service, the Alberta Securities
Commission, the Ontario Securities Commission, the Financial Conduct
Authority of the United Kingdom, and the Financial Industry Regulatory
Authority.

The Commission's investigation in this matter is continuing.

https://www.sec.gov/news/press-release/2018-28 [3]

https://www.sec.gov/litigation/complaints/2018/comp-pr2018-28-beaufort.pdf
[4]

Mike



Links:
-⁠-⁠-⁠-⁠-⁠-⁠
[1] https://www.justice.gov/usao-edny/pr/six-individuals-and-four-corporate-defendants-indicted-50-million-international
[2] https://www.justice.gov/usao-edny/press-release/file/1040471/download
[3] https://www.sec.gov/news/press-release/2018-28
[4] https://www.sec.gov/litigation/complaints/2018/comp-pr2018-28-beaufort.pdf

The actions of a few causing the jobs of many at BSL & BACSL leaving all but the most astute with little or nothing.

I expect there will be numerous claims being made to the FCA for losses incurred but those claims are limited to max out at £85k I believe.

This is likely the tip of the iceberg. The FCA has long been not fit for purpose. It has taken the US to drag these ratbags out into daylight, while the FCA are on their third G &Ts. Manipulation, insider trading and nods, tweets and winks are symptomatic of the LSE. It could learn a lot from the US and Canadian stock exchanges but refuses to do so or just can't be bothered

Agreed iturama, even when presented strong evidence the FCA and LSE fudge every issue concerning small cap stocks and loads of AIM stocks that Brokers pump and dump and then later on get de-listed and then wound-up for the benefit of the the mob, and to wipe clean the trail of fraud, which the SFO will not look into because they cannot see the value of less than £20m, when in fact they might have scammed many more millions that that even, though insider and pals act trading.

Pump and Dump even by these so called regulated firms, and the LSE AIM regulators giving the impression that they regulate the companies to protect Private Investors, when it is just the opposite in fact.

Clocktower, the FSCS limit is £50k for investment products (£85k is for bank/savings accounts)

Another Wolf outfit?

commervan, my apologises you are of course correct. I wonder which investors will take a hit and be left for the FSCS to pick up? My guess is that small investors will be the ones that will on the basis - they can claim from the FSCS even though it will take them time, and some will not even claim through lack of knowledge.

In truth small investors should be protected by the FSCS - who should then pick up the bill directly with the administrators.

I'm tied up in this mess in a small way. Told wont hear anything until April.

Claret Dragon, Hopefully, you did not leave them holding much cash, as its seems PwC fees will be taken from the cash pile.

I also had a very small amount of stock with them as I hold several accounts with different brokers in case of these sort of events or website issues with other on-line brokers occur. Due to the issues they were having when they set up the new website there were trading problems that flagged cash handling issues. Fortunately, I had withdrawn funds and only left a negligible cash balance with them.

I cannot see PcW being able to transfer any portfolios for some months, and I doubt they will be ready to do so in April.

Hold one stock with Beaufort. Only loose change lying around. Cant sell my holding as I have asked last week. April was the earliest date given, However the person I spoke to was vague. Doubt if they have any idea how long the process will last. Very frustrating.

i was with hoodless for many years the previous name of Beaufort..i rang them up once to sell my shares in ridge mining and my broker said " sorry mr ******* i cant sell them because they have been lent out..

Didnt know what he meant at the time but i do now...they were naked shorting ridge mining before ultimate takeover which happened

maestro, you could have forced the issue and not allowed them to brush you off with that excuse.

yeah i know but i was abit green at the time..should have informed the FSA straight away..think this practice is still rife and ascent resources is one being targeted now and ultimate takeover

Agreed maestro, this may well be one of the problems that PcW are having to deal with, hopefully the records have not been destroyed but I noticed they stated on their latest update that they were having to sort out "a number of open positions and transactions which need to be resolved and concluded. This may impact the total once a finial reconciliation takes place"

However, the position looks better than what was stated on 2nd March:
” It is clear given the better information now recovered that entitlements will be closer in magnitude, if not exceeding, the amounts identified above of £50m and £850m."

Wolf tactics maestro.

I also got Beaufort by default when HB turned to custard.

Wish I had changed at the time to alternative.

Lets see how long this one stretches out for.

Claret Dragon, Have you filled out and sent your claim form yet?

For those that have not the form can be found at the foot of the page that I have posted the link below.

https://www.pwc.co.uk/beaufort

Not filled out form yet.

Will send it off once back in the UK this weekend.

Thanks

Clocktower.

Clock, have you received a communication from pwc inviting you to complete this form? I ask because to me it looks more like a claim form to be completed by suppliers to beaufort who have not been paid for their services.

There is a note on the PWC statement to the effect that Beaufort clients should wait to be contacted.

Beaufort had a dealer in charge called Scott who often refused to buy or sell for clients
because no security was done. But there was never any answer on the phone lines for those who did the security so if you cannot sell online and nobody is answering the phones to do security and the dealers refused to do the security then you were basically fecked. The FCA should have shut this outfit down a long time ago. The simply stockbroking side of the business was fine until they merged with crooks Hoodless Brennan.