DMS caught up in class action against client
Chelsea Football Club players
(CNS Business): Cayman-based financial services firm, DMS, has been sucked up into a class action suit against a former BVI company accused of fraud which was once one of its clients. More than 300 investors who collectively had more than $50 million invested in CWM Limited, a foreign exchange trading firm incorporated in BVI and struck off last year, claim it was nothing more than a Ponzi scheme and the owners stole their cash to fund lavish lifestyles. In a suit filed with the Cayman Islands Grand Court earlier this month, the investors are seeking to get their cash back plus interest and damages.
But the 300 plaintiffs are also pointing the finger at DMS Bank & Trust Ltd because CWM banked with the local finance firm’s offshore entity and they claim executives there were aware of the scam by their client. DMS denies the claims, and owner Don Seymour told CNS Business that the lawsuit would be “vigorously defended”.
DMS was not the only bank to do business with CWM and its group of companies, which was at one time a sponsor of Chelsea Football Club. The relationship made headlines in the UK after the deal collapsed when the alleged fraud was exposed and Scotland Yard began an investigation. No other banks that did business with CMW Ltd have been sued as yet.
Since the scandals relating to the fraud have blown up, DMS is understood to have been working closely with investigators to assist the enquiry.
“It’s unfortunate that these same unscrupulous persons are now continuing to victimize these plaintiffs with false promises of restitution through frivolous litigation,” Seymour said about the suit.
The legal claim outlines the allegations against CMW based on the police enquiry and states that, contrary to the representations to investors that their cash was to be used to engage in foreign currency trading, no trading ever took place.
None of the companies in CWM deposited funds from the plaintiffs in segregated accounts as agreed. Instead the cash was used to fund historic investors or other CWM expenses, including the sponsorship of the football club and other sports events, as well the lifestyles of the company boss, Anthony Constantinou, and his senior executives. The plaintiffs claim that the $50 million invested is all but gone.
Category: Finance, Financial Crime
