Former CEO ‘Made False Statements’
The former CEO of a Bermuda-based investment company made false statements to induce investors to buy worthless shares, a London jury has been told.
Geoffrey Pearson, 63, has pleaded not guilty to 13 counts of making misleading statements to the financial markets between June and October 2005 while he was CEO of Langbar International Ltd.
Langbar is at the centre of a major fraud scandal, according to reports on the Bloomberg news service.
Langbar was “worthless” and “fraudulent from the start,” prosecutor Jonathan Caplan said yesterday [May 9] at the beginning of Mr. Pearson’s trial.
The company was set up in Bermuda in June 2003 and began trading on London’s Alternative Investment Market later that year.
Shortly after starting business, Langbar said it had won South American contracts which it sold for a profit of around $350 million. Those contracts were a fictitious, as was the money, Mr. Caplan told the jury.
Mr. Pearson was appointed CEO of the company, formerly known as Crown Corp., in June 2005. By October of that year, trading in the company’s shares was suspended. Lawyers for Pearson will present his defense later in the trial of the case brought by the Serious Fraud Office, the UK agency responsible for prosecuting white-collar crime.
