Langbar International’s ex chief executive of the £357 shell company, which collapsed six years ago causing huge losses for stockholders, has been sentenced to one year in jail and cannot be a company director for five years. His act was described as fraud of a grand scale by the The Serious Fraud Office.
On Monday Stuart Pearson was found guilty on three counts of misleading investors. He was guilty of falsely claiming the Aim listed investment company originally called Crown Corporation had assets held by Banco do Brasil with some assets being transferred to Langbar. August 1 will be the confiscation hearing.
Many private and institutional investors including Gartmore and Merrill Lynch lost millions of pounds after they had invested in the company. They had been attracted by the £357m Pearson said was in the bank in the Netherlands and Brazil.
The SFO director Richard Alderman said the fraud was of the grand scale and with little regard for integrity of the financial markets or for the inevitable losses and problems caused to the investors. The investigators worked closely with Spanish authorities and the City of London police in a painstaking investigation. No one else was charged in the case by SFO.
Mariusz Rybak found Crown in 2003 and described the business as one that bought underperforming companies and turning them around and then selling them for a profit. The Bermuda based company was on Aim that year but shares fell sharply following a few deals and there was a rights issue. Pearson joined Crown as CEO in 2005 after the company took over his firm.