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Diamond broker wound up by High Court 20 November 2013

Jubilee Diamonds Ltd, a self-styled diamond broker, has been wound up by the High Court for making false claims regarding investment returns and exit strategies for investors.

The company, which sold coloured diamonds as an investment opportunity to the public, had been trading for 18 months and received approximately £2.3m during this time.

The company was placed into provisional liquidation on 1 August 2013, and was wound up on 6 November 2013.

David Hill, an investigations supervisor with the Insolvency Service, said: “The only people to benefit from this company’s business were those who ran the company and not the investors.

“They set out to trade with a lack of scruples, relying on badgering tactics to get investors to part with their money.”

Following an investigation by the Insolvency Service, a few discrepancies were discovered. Using high pressure sales tactics, the company made a series of false claims involving its operation.

Among its claims, the company claimed to source diamonds directly from mines and that it operated a diamond cutting facility in Antwerp.

The investigation discovered that the diamonds were obtained from online retailers, whose products were directly available to the public.

Though Jubilee Diamonds stated that minimum investment returns of 15% per year were available, it orchestrated mark ups ranging from 76% to 1,592% to charge investors.

Jubilee Diamonds assured investors of a variety of exit strategies, including onward sales at auction houses, and to collectors and retailers.

Over a period of 18 months, there was a high turnover of over 100 brokers, many of whom earned commissions of 25% of the sales price obtained.

The company mandated that, for safekeeping, customers store their diamonds at a storage facility at Harrods department store.

Although they claimed that customers could have direct access to their diamonds at any time, the storage facility could only be accessed by the director in whose name the facility was under.



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