The City brokerage collapsed after a $50m scam involving Picasso painting
An FBI $50m sting, reveals an illicit network stretching from the Caribbean to Budapest, a Picasso, all helped bring down Beaufort Securities. US Department of Justice accused the English broker of money laundering and stock manipulation. A statement from the UK’s financial regulator at 7 am last Friday, that told Beaufort Services was insolvent. The brokerage had been struggling for revenues, since Financial Conduct Authority had imposed restrictions on its business and started to keep a watchful eye on the company’s activities for the past 18 months as the brokerage has been charged by the US Department of Justice for their part in the $50m share manipulation and money laundering scam. Although London Stock Exchange named Beaufort Securities among the UK’s 1, 000 companies to Inspire for 2017, the US prosecutors alleged that Beaufort Securities were at the centre of an illicit global operation that covered via a network of brokers in the Carribean, Mauritius and Budapest, to London’s Mayfair art world.
PwC, the administrator is now scrambling to recover £ 850m in client cash and assets, and as Beaufort Securities’ own funds were very limited the investor will have to bear the cost of recovering their money.
It was emerged the FCA delayed closing Beaufort Securities for several months to allow the FBI to finish its undercover operation. The company was low quality and known for not doing their due diligence properly. Beaufort Securities was a broker for 61 small groups mainly oil and gas industry providing research and helping with share placements.
In 2016, an undercover FBI agent approached 26-year-old Panayiotis “Peter” Kyriacou about participating in “pump and dump” stock manipulation schemes and hiding the agent’s US nationality on the paperwork. Mr Kyriacou is alleged to have used the stock of HD View 360, a small US security company. The scam involved publishing false promotions and matching trades where two parties buy and sell stock at the same time and price to create the illusion of liquidity. He introduced the FBI agent to Vinesh Canaye, a Beaufort Securities Investment Manager in Mauritius. Mr Kyriacou’s uncle Aristos Aristodemou was then brought in to help launder the proceeds of the stock manipulations back to the US according to the US prosecutors, suggested using art as the only market that is unregulated.
Matthew Green owner of Mayfair Fine Art Ltd and son of the well-known art dealer Richard Green agreed to facilitate the purchase and potential resale of the Picasso painting “ Personnages” valued at £6.7m. Days before the payment for the Picasso purchase was due the FBI swooped and arrested Mr Canaye in the US.