The Securities and Exchange Commission has filed fraud charges against a US-based LLC – Windsor Jones and its principal based in the UK, Anthony Collins. According to the SEC, the firm and Collins pursued a fraud involving purported fine wine investments raising at least $4 million.
The pitch was as one would expect, buy wine low and sell it later at a profit. According to the complaint, the wine scheme expected to achieve a return ranging between 10% to 30%, and the company would not receive any compensation or profit until the wine was sold. The SEC claims that in reality, Windsor Jones LLC used no more than 32% of the investors’ money for the purchase and storage of wine.
The SEC alleges that Collins/Windsor spent $367,000 on credit card payments, $176,000 for shopping at UK-based fine watch companies, $870,000 for commissions and payments to sales representatives and other individuals, and $340,000 to Collins himself. At the same time, for the bit of wine purchased, Windsor Jones and Collins also failed to disclose that they charged a markup of 30% to 50% to investors on their purchases of wine.
In marketing the investment, Windsor claimed that fine wine has outperformed other investment options, and the company had expertise in achieving profits for investors.
The investors lived across the US, and many were elderly. Windsor used cold call tactics where representatives with British accents would attempt to induce investors.
The SEC’s investigation is said to be ongoing. The complaint, filed in the Central District of California, alleges that Collins and Windsor Jones LLC violated the registration provisions of the Securities Act of 1933, the antifraud provisions of the Securities Act of 1933, and more. The SEC seeks injunctive relief, disgorgement plus prejudgment interest, civil penalties, and a prohibition on Collins serving as the officer or director of a public company.