The FCA has announced that it has opened an enforcement investigation into Market Financial Solutions Limited (MFS).
MFS entered administration on 25th February amid allegations of fraud. The lender initially claimed it was entering temporary administration following a "procedural matter with its primary banking provider". However, it later emerged that MFS and its owner had links to a former Bangladeshi government minister subject to international money laundering investigations.
The lender is an Annex 1 business, which means it is registered with and supervised by the FCA for its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Annex 1 registered firms are not authorised or subject to wider FCA regulation.
Earlier this week, the administrators of Market Financial Solutions secured a worldwide freezing order against its owner, Paresh Raja.
Neil Dooley, partner at Quillon Law, commented: “The scale of the alleged losses, coupled with claims that MFS and Paresh Raja were operating some sort of Ponzi scheme, made an application for a freezing order inevitable. The risk of asset dissipation, alongside the allegation that Mr Raja left the UK in haste, left the administrators with little choice.
"The key issue now is whether Mr Raja complies, as required, with full disclosure of his assets worldwide, including those held in trust or by nominees. He must then decide whether to challenge the freezing order or keep his powder dry and focus on defending the underlying fraud allegations.”
