Russell-Cooke client, Johannes Skúlason, co-owner of Icelandic company Skúlason ehf was acquitted of charges of fraudulent trading at Ipswich Crown court on 8 June 2011. Jae Carwardine successfully represented Johannes Skúlason, and a case summary can be viewed here.

Investors from the UK were alleged to have lost millions of pounds.

The allegations followed a Serious Fraud Office (SFO) investigation which started in 2005.

The SFO's case was that through a 'boiler room fraud', worthless shares in Mr Skúlason's company were sold through a network of companies and brokers. It was alleged that more than 80% of investments went as commission to intermediaries.

Key to the prosecution case was the claim that no investor would have parted with their money if they had known that such a high proportion of any investment was being paid in commission.

Mr Skúlason maintained throughout that, although his company was under financial pressure, it would have survived and thrived with the investment that was being sought. This was not a case of a 'shell' company but a real ongoing business with a number of substantial projects on the horizon.

Mr Skúlason said: "The commission paid to the brokers was very expensive but unavoidable because I had exhausted all the other options for investment open to the company. There were good commercial opportunities and I hoped the investors introduced by the brokers would continue to invest on a more economical basis once relationships had been established"

In his evidence, Mr Skúlason asserted that he was as much a victim of the brokers as the investors. He successfully relied upon forensic accounting and management consultancy evidence; the prosecution asserted that the defence had used "accountancy as alchemy." Defence witnesses gave evidence via video-link from Iceland and the United States. The defence showed that, without the intervention of the SFO, the investors might have received a substantial return on their investment.

The investigation has been heavily publicised in Iceland causing great damage to Mr Skúlason's reputation and business.

Jae Carwardine partner at Mr Skúlason's solicitors Russell-Cooke LLP, commented: ''The SFO, by their very name, prosecute the most serious and complex fraud cases.  They have considerable resources available and far reaching powers; I believe this is a case which highlights the reality that they should exercise these powers with more care and prosecute responsibly. The negative impact of the SFO's intervention in this case was catastrophic for Mr Skúlason and his company and it meant that the financial losses sustained by investors, the company and to Mr Skúlason himself have been substantial. This case illustrates how a protracted and ultimately unsuccessful investigation and prosecution can sometimes be anything but in the public interest.'' 

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