Two companies that sold rare earth metals at “hugely inflated prices” have been wound up in the public interest by the High Court.
An investigation by the Insolvency Service resulted in petitions being presented in the High Court on 18 December 2013 to wind up Westpier Consultants Limited and Global Metal Exchange Limited.
The companies sold metals on behalf of suppliers Denver Trading Limited and Denver Trading AG, inflating prices by 300-500% and promising return on investments of approximately 200% within two years.
Both Denver Trading Limited and Denver Trading AG are both currently in provisional liquidation following petitions from the Insolvency Service to wind the companies up.
Customers had “almost no prospect of making any investment returns” due to the mark-ups involved in the purchases.
David Hill, a chief investigator at the Insolvency Service, said: “These two companies were carrying out the ultimate scam. Not only did they sell the rare earth metals at an inflated price, they also lured investors in by promising high yields once the stock was sold, which was just hot air.
“The court has taken a dim view of this behaviour and wound up the companies, a result would-be scammers should take seriously.”
The Financial Conduct Authority has issued a warning concerning companies that have approached individuals to sell precious metals as an investment, using high pressure sales tactics and targeting vulnerable consumers.