FCA decides to fine and ban for sham trading

The FCA has published a Decision Notice setting out its decision to fine Nailesh Teraiya £5.95m and ban him, in its latest enforcement case involving “cum ex” payments.  Mr Teraiya was formerly the sole controller and chief executive of Indigo Global Partners Limited (which went into liquidation in 2021). The FCA found he was responsible for the firm’s participation in a scheme which purported to claim a repayment of over €90m from the Danish tax authority. In fact this was not a repayment as the “shares” to which it related did not exist, no dividends had ever been paid and no tax had been deducted. The claims had involved many false and misleading documents that Indigo produced, which the FCA found Mr Teraiya knew to be false and misleading, and knew that they were used to support a claim for repayment of taxes that had in fact never been paid.

The FCA found that Mr Teraiya received over £5m through third parties for his part in the scheme, as well as over £300,000 through the firm.  The level of the fine deprives Mr Teraiya of all financial benefit he received from his involvement in the scheme, and the ban reflects the FCA’s view that he acted dishonestly and with a lack of integrity.

Mr Teraiya has referred the decision notice to the Upper Tribunal.