Beta Commodities Limited was a boiler room operation that cold called retail investors and scammed them into buying carbon credits as investments. The company’s director James Michael Cable has now been disqualified as a director for 14 years.
Beta Commodities, which traded as Alpha Commodities, was closed down in the High Court in London in May 2014, following an investigation by the Insolvency Service.
Alpha Commodities is yet another boiler room scam company that sold carbon credit as investments and used Carbon Neutral Investments’ “clearing and settlement services“.
Between April and October 2012, Beta Commodities Limited made sales totalling £681,000 by cold calling members of the public and persuading them to buy carbon credits. Beta Commodites charged retail investors between two and five times the price that the company had paid for the carbon credits.
Alpha Commodities also sold fine diamonds and precious metals.
In a press release from the Insolvency Service, Paul Titherington, Official Receiver in the Public Interest Unit, said:
Mr Cable should have known that the carbon credits the company was selling were wholly unsuitable as an investment given the price the company charged, and the absence of a marketplace where investors could sell their carbon credits.
Contrast this with a March 2012 Alpha Commodities company brochure:
The best example of an asset class bucking the trend is that of VER carbon credits, for some people still hard to understand, but in reality actually quite simple to get your head around once you’ve begun to have a proper look. Akin to the dotcom tech boom several years ago the market is making a case to be recognised as one of the most attractive investment opportunities of the last 20 years….
Carbon credits are rapidly becoming the private investors favourite, furthermore investment banks and large institutions are currently taking big positions in the most exciting new financial product which is tipped to become the world’s largest financial market. The potential for triple digit medium term returns is completely viable; this could be a portfolio stalwart for some time.
Obviously, these statements are extremely misleading. The most important sentence in the brochure – which should have been enough to prevent anyone from handing over their money to Alpha Commodities – is in the disclaimer at the end:
Alpha Commodities is not regulated by the Financial Services Authority and is not authorised to offer advice about any form of investment, whether regulated or unregulated.
While it’s good news that the director of a scam company has been disqualified as a director, the bad news is that this doesn’t mean that the people who were scammed will get their money back.
In September 2015, the liquidators of Beta Commodities filed a progress report with Companies House. The report states that,
To date claims totalling £1,112,497 have been received. The claims received have not yet been agreed as it is currently uncertain what recoveries will be made to enable a dividend to be paid.