Three directors from collapsed investment firm Louis Group (IoM) have been banned from the financial industry worldwide by an Isle of Man court for a period ranging from 5 to 12 years.
Alan Louis, the head of a failed island investment firm, as been banned from acting as a company director for 12 years. Two other directors of Louis Group (IoM), Lukas Nakos and John McCauley, were disqualified from acting as directors for six years and five years respectively.
Deemster Rosen QC said the 12-year ban handed to Alan Louis was the shortest period of disqualification the court could countenance for "such grievous and morally culpable misconduct".
For a period of four years, he flouted his duties, took funds and mismanaged an insolvent business at significant expense to the public"
He said in a judgment handed down this week: 'The nature and scale of Louis' misconduct and the harm which he caused can be measured in losses of tens of millions to investors and creditors he put at risk.
"For a period of four years, he flouted his duties, took funds and mismanaged an insolvent business at significant expense to the public," local news outlet IoM Today reported.
Louis Group (IoM) acted as a fiduciary and corporate services provider, licensed by the FSA, whose clients were largely other companies in the Louis Group. Investors were promised high rates of return from property-backed investments. But funds were systematically transferred to other allied companies in the British Virgin Islands.
Louis Group (IoM) launched in the island in 2002 and was wound up by order of the high court in 2013. There were some 120 separate Louis Group companies in the Isle of Man.
Total losses of investors' money in island-based entities in the Louis Group have been estimated at £50m by the liquidators.
Around a quarter of the 700 investors were from the Isle of Man, the remainder being mainly from South Africa and the UK.
The FSA alleged that the investment fund business he established in the island was thoroughly mismanaged, especially between 2007 and 2011.
Louis was able to direct the movement of large sums of money to his other companies, with no proper independent control or records of the loans and other credits involved, leading to 'serial insolvency', the judgment states.
Deemster Rosen said all of Louis' excuses were "hollow rhetoric" and he expressed "no remorse whatsoever".
Nakos' involvement was far less extensive, he said, but the "prime movers in corporate misconduct almost always need lieutenants". McCauley's role was significant in causing harm and made payments for Louis when insolvency was obvious.
Four other Louis Group (IoM) directors have given voluntary undertakings of disqualification to the FSA.