Defrauded investor gets money back
Posted: 14th January 2013
A businessman who invested US$250,000 in a new commercial venture on the basis of a fraudulent misrepresentation has been awarded his money back by the High Court. A statement made to encourage the investment had been knowingly false and the businessman was entitled to be put back in the same position he would have been in had he never parted with his money.
The claimant had put the money into a business which was focused on introducing light-based technology, used to remove body hair, tattoos and skin blemishes, to the UK market. He had previously been told by the founder of the business that a third party had invested US$500,000 in the same venture.
The court ruled on the evidence that that statement was false to a material degree and had been relied upon by the claimant who was induced to make the investment. The statement had been made with the intention that the claimant would understand that the third party had either made the investment or was committed to doing so.
The court’s decision means that the claimant is entitled to the return of the US$250,000, plus interest from the date of the investment in May 1998, less any payments he received as a result of his involvement with the business.