Having been convicted on 9 January 2015 following a trial, Alex Hope was today sentenced at Southwark Crown Court to a total of 7 years’ imprisonment for defrauding investors of significant sums and operating a collective investment scheme without authorisation.
Hope's co-defendant, Raj Von Badlo, who had earlier pleaded guilty, was sentenced to a total of 2 years’ imprisonment for recklessly making false representations to investors and promoting a collective investment scheme without authorisation.
In sentencing Hope, HHJ Taylor remarked on the sophistication of the scheme which involved the falsification of documents and the management of his persona. The impact on investors was significant. HHJ Taylor said that Hope had "shown no acceptance of [his] own dishonesty."
The Judge also stated in sentencing Von Badlo that the risk of the scheme must have been clear to him.
In total, over 100 investors entrusted Hope with over £5.5 million. The scheme was closed down by the FCA in April 2012. As a result of the work of the FCA, approximately half of the amount taken from investors was identified and frozen. Consideration of confiscation and other financial orders will take place at a later date.
Commenting on the case, Georgina Philippou, acting director of enforcement and market oversight, said:
"Alex Hope presented himself as a trader with a flair for trading on the foreign exchange markets when in reality he spent a good deal of his investors' money on himself.
"With the assistance of Raj Von Badlo, Alex Hope enticed dozens to invest considerable sums in his fraudulent scheme.
"This case shows that the FCA will vigorously protect consumers from those who break the law and do whatever it can to get their money back to them."
Despite telling his investors that he would trade their money successfully on the foreign exchange markets, only 12% of the total money that investors gave Hope was ever traded and when he did trade, he lost almost all of the money in his trading accounts.
Hope exaggerated his trading abilities and the returns he was making. He used doctored copies of statements from his trading account to mislead investors. As a result of this deception, he continued to attract investors, with new money coming in used to pay those who wished to withdraw their funds.
Raj Von Badlo (also known as Raj Shastri) promoted Hope’s scheme to a large group of investors. Over 75 investors gave £4.29 million to Hope as a result of Von Badlo’s actions.
Hope used over £2 million of investors’ money to fund his lifestyle. He spent over £1 million in a casino, over £200,000 on designer watches and shoes, £60,000 on foreign travel, and over £600,000 in bars and nightclubs in London, Miami and New York.
In April 2012, following information that suggested Hope was operating an unauthorised investment scheme, the Financial Services Authority (FSA), the FCA’s predecessor, obtained a restraint order against Hope’s assets, arrested Hope and searched his house in a joint operation with City of London Police.
In May 2012, Von Badlo’s house was searched and he was arrested.
Von Badlo pleaded guilty to the offences for which he was sentenced on 22 July 2014.
Hope pleaded guilty to operating a collective investment scheme without authorisation on 23 April 2014 and was convicted of fraud by a jury on 9 January 2015.
Notes to editors
- Hope was sentenced to 7 years for fraud and 16 months imprisonment for the section 19 offence, both to run concurrently.
- Von Badlo was sentenced to 2 years for recklessly making false or misleading statements and 12 months imprisonment for communicating an invitation or inducement to engage in regulated activity, both to run concurrently.
- All remaining counts on the indictment[1] were ordered to lie on the file.
- All sentences were passed on 30 January 2015.
- The sentence imposed in relation to Hope equals the longest imposed as a result of any FCA or FSA prosecution.
- In these proceedings, the FCA was represented by Sarah Clarke of Serjeant’s Inn Chambers and Tom Baker of QEB Hollis Whiteman.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.