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City of London Markets, Milestone Group and the web of deceit

By Mr Karma | Friday 21 April 2017


 


Readers will be aware of the aborted placing in Milestone Group (MSG) and the City bucket shop that is City of London Markets per HERE. What we can reveal is that the individual at the heart of the debacle is a gentleman by the name of Spencer Binks – a name in certain circles of the City that is described as “colourful”.

City of London Markets it seems allowed this chap to represent himself as a party connected to it and commit to placing monies in Milestone Group. A cursory glance at the FCA register reveals however that the fine chap that is Mr Binks was not registered with City of London Markets and indeed has never been registered with them.

We also understand from a source very close to the flame that the aborted placing of £1.25 million at 1.5p was not the first occasion that City of London Markets and its head Mr James Douglas had allowed Mr Binks to commit to placing monies with Milestone Group. Indeed we are told that a prior placing at 1p in late September also went unpaid for by City of London Markets – Jarvis its underlying “prime broker” in fact picking up the tab for this and City of London Markets then selling the stock in the immediate days after the completion of the placing in order to level the debit and collect its placing fee (typically 5%).

It gets worse. At the time of the commitment for the larger placing, knowing full well that the firm had no possibility to pay Milestone the committed £1.25 million, City of London Markets, under the supervision of Mr Douglas, actually proceeded to transact business in Milestone shares with the express intent of retaining the elevated stock price and pushing it over the 1.5p level in the dual hope that Jarvis would write the larger cheque (this time for £1.25 million) so allowing Mr Binks and his cohorts at City of London Markets to sell the stock at a higher price and pocket the placing fee – a not insubstantial £62,500. Documents we have seen, incredibly, show City of London Markets chasing the placing fee even though it knew that it would be unable to pay. “Cheek” is an understatement. Another word beginning with “C” springs to mind!

The problem was, of course, that Jarvis balked at divvying up £1.25 million this time – a much larger sum than City of London Markets’ initial heist which we understand was circa £250,000 – and for the poor Milestone shareholders and the clients City of London Markets put into the stock the rest is of course history as the chart below reveals.

As if the revelations above are not shocking enough, we can also exclusively reveal that it seems, based on the documentation we have seen, that the firm was not only actively engaged in Market Abuse and what looks to be prima facie insider dealing through trading in Milestone whilst being on the company’s Insider list, but it appears to have been carrying out unauthorised investment business – a criminal offence and one that carries up to 2 years in jail and a potential fine. At the time of the trading in Milestone Group, City of London Markets were not permissioned to “manage” investments in relation to Spreadbet instruments, yet we have seen documentation in which it directed trades in a spreadbet account. Can you guess which company it was trading in? Yes, you guessed it – Milestone Group!

We understand that a file on this matter detailing the following issues is to be sent to the FCA in the days ahead:

1. Market Abuse
2. Conducting unauthorised business
3. Potential Insider Dealing legislation breaches

For anybody who is transacting business with the bucket shop that is City of London Markets we caution you to be very careful given the dossier of actions we detail here that illustrate its being anything but “fit & proper” to conduct investment business. We suspect that City of London Markets’ registration with the FCA will not be for long.

We also detailed our concerns HERE regarding the company’s apparent breach of Capital Adequacy maintenance considering that the debtor figure is made up almost entirely of funds taken out by Director James Douglas and is highly unlikely to be returned to the company. Our sources also reveal that Mr Douglas (who changed his name from James Turtle) has also undergone an IVA in recent years. How the FCA can authorise individuals like this to manage capital when they cannot manage their own is total and utterly beyond us...

Beware!


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