Police have launched a criminal investigation into an alleged fraudulent investment scheme managed by a north-east financial firm which could see investors losing hundreds of thousands of pounds.
An investor who contacted the Press & Journal asking not to be named said the investments available through Midas Financial Solutions (Scotland) were particularly popular with fishermen in Fraserburgh and said he believed that losses for investors could be much more.
A letter sent out to potential victims of the scheme from Detective Inspector Iain McPhail of the Economic Crime Unit and seen by the Press & Journal said its investigation was “large scale”.
A spokeswoman for the force said it was unable to confirm how many people may have been affected by the alleged fraud as the investigation was at an “early stage”.
The letter also advised investors there was no possibility of recompense from regulators.
DI McPhail wrote that Midas was not authorised by the Financial Conduct Authority (FCA) to accept deposits. As a result the scheme was “not afforded the protection afforded by regulated products” including recourse to compensation.
Police said that Aberdeen-based Midas Financial Solutions and “independent financial advisors attached to that firm” are the subject of a criminal investigation.
The criminal investigation came after the FCA launched its own investigation in August into short-term investments being offered by Midas.
The firm, led by financial advisers Alistair Grieg and Ian Towe, is not registered with the regulator as authorised to provide financial products or services.
Police added that the firm is “not currently trading”.
In a letter from Midas to the investor seen by the Press & Journal, the firm claimed it was an appointed representative of Sense Network which is authorised by the regulator.
A director of Sense Network, based in Cheshire, confirmed it terminated its relationship with directors of Midas in August.
Records at the FCA also show that Mr Towe and Mr Grieg were no longer regulated by the FCA through its tie up with Sense as of 11 August.
A spokeswoman for Police Scotland said: “Police Scotland has been made aware of an alleged fraudulent scheme under the name of Midas Solutions by the Financial Conduct Authority.
“A criminal investigation has been launched and enquiries are at an early stage.
“Anyone who thinks they may have been a victim of economic crime is asked to contact Police Scotland on 101.”
Steve Young, commercial director with Sense Network, said the firm “had no knowledge of what apparently has been happening” at Midas.
He added: “It was never anything to do with what we did. It was completely outside of the relationship we had with Midas. We feel very sorry for the investors. We hope everything works out OK.”
The Press & Journal attempted to ring the firm at its offices in Aberdeen but did not get an answer.
Mr Towe also declined to comment when contacted.
Kevin Alexander, a former director of Midas, confirmed he no longer worked for the firm and said he was aware of the police investigation, although he declined to comment further.
The FCA declined to comment except to say investors should check on the Financial Services Register on its website to make sure firms are authorised.