FCA Flags Black Diamond Amid Crackdown on Fake Asset Managers

Britain’s financial regulator is ramping up its scrutiny of unregulated investment managers. Today, the Financial Conduct Authority warned against a company called ‘Black Diamond Finance,’ which the FCA said on Monday it had faked its authorization.

Black Diamond Finance, which also goes by the name Black Diamond Online, manages investments on a discretionary basis for the UK and international private investors, trusts and charities. However, the city watchdog warned that such services are increasingly being used as a vehicle for financial scams.

Also, the FCA said that operatives of Black Diamond are using the details of a regulated brand as a way to get people to hand over details or money, as well as giving the impression they work for the authorized company.

The watchdog added the scammers are using a fake website as part of the scam though they are not authorized or registered with the FCA and have 'no association' with the real company, Black Diamond Capital Management Ltd.

The FCA has been sharpening its focus on investment and trading firms in recent months. The regulator appears determined to protect consumers not only from fraud but also from losing small fortunes to regulated firms that may offer “products causing similar harm.”

The City Regulator Has Other Concerns

In a letter sent to asset managers and brokers last year, the FCA said it would undertake further supervisory and regulatory work in key areas it had identified, including ensuring cost disclosures to investors are up to scratch.

Moreover, the watchdog highlighted its concerns over financial promotions that falsely implied that all of a firm’s activities were regulated by the FCA or other regulators, when in fact they were not.

“We have seen evidence of an increase in wealth managers’ discretionary portfolios being used for pension scams, and poor conduct from wealth managers who make unsuitable investments in high-risk assets for their clients,” the FCA said.

Retail FX/CFDs brokers have come under the spotlight with the closure of two regulated brokers in a single month. SVS Securities Plc (SVS), which was set-up in 2002, acted as a regulated financial services broker, holding significant amounts of Client Money Client Money Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Read this Term and assets. The second case involved AFX Markets Ltd (AFX), which was set up in 2011 and FCA-authorized since May 2012.

Furthermore, there have been a number of high profile incidents in the wider financial services industry over the last few years, many of which have led to the collapse of firms.