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Financial.org, a UK company that describes itself as an education business and sponsors a Formula One team, is managing hundreds of thousands of dollars for Asian investors even though it is not licensed to engage in financial transactions, according to 17 people who say they have invested through the firm, reports Reuters.
The 17 people, from China, Indonesia, Malaysia, Singapore, Thailand, Vietnam and the UAE, told Reuters they had each given between $3,000 and $400,000 to Financial.org to invest.
"I have doubled my investments," said Azmi Tumpang, a former construction worker from Malaysia outside a gala dinner organised by Financial.org on the sidelines of the Abu Dhabi Grand Prix in late November.
Most of the people said their money had been invested in US blue-chip stocks and that they had made a profit. Reuters was unable to verify whether the share transactions took place.
Financial.org is not on a publicly available list of companies authorised and regulated by Britain's financial regulator, the Financial Conduct Authority (FCA), to buy and sell stocks or bonds for clients. Offering investment services without regulatory permission is a criminal offence in Britain.
Financial.org, which has an office in London's Canary Wharf, declined to comment on whether it acted as an investment firm.
The company signed up two years ago with the UK's official company register as a real estate business, according to filings.
The UK registrar of companies, Companies House, said it was preparing to strike off the firm on Jan. 23 because it had never filed accounts. If a company is struck off, it cannot continue to trade legally and its assets pass to the state.
UK-registered companies must by law be authorised and regulated by the FCA if they deal in securities such as shares and bonds for clients, even if the investors are outside Britain.
Under FCA rules, this applies both to principals - parties investing on behalf of clients, and agents - firms including brokers that arrange for investments to take place.
The FCA declined to comment about whether Financial.org was operating illegally.
The regulator has previously warned of the dangers of investing through firms it has not authorised, as no independent checks have been made on their businesses.
It said it had received reports of more than 8,000 cases of unauthorised businesses in the last financial year.
On the home page of its website, Financial.org says it is an education platform, providing "financial knowledge and skills". "We do not deal with securities and receive any financial benefits from financial products and service providers," it says.
However, elsewhere on its site, it also says it "helps members to manage and oversee their investments" and "provides self-directed investors with brokerage services".
The Monetary Authority of Singapore last March placed Financial.org on an investor alert list of "unregulated persons who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS", its website says.
The authority said investors should "exercise caution" when dealing with companies on the list.