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Langbar International

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Adapted from the English Wikipedia article Langbar International, available under CC BY-SA 4.0Updated 30 November 202514 sources
Langbar International Limited
Company typeLimited company
IndustryFinancial services
PredecessorCrown Corporation Limited
Founded2003
Defunct2005
FateInvolved in major share fraud case; ceased operations
Headquarters
Bermuda / United Kingdom
Key people
Stuart Pearson (head of Langbar Capital)
ProductsInvestment and acquisition of struggling businesses

Langbar International is a limited company that originally appeared on the Alternative Investment Market of the London Stock Exchange under the name Crown Corporation Limited in 2003 and later became the most significant share fraud case recorded on AIM. The company was subject to investigations by the Serious Fraud Office,[1][2][3][4] as well as the City of London Police, the Accountancy Investigation and Disciplinary Board,[5] and encountered multiple civil lawsuits in the High Court.[6][7][8][9][10][11]

Originally known as Crown Corporation, the entity was rebranded as Langbar International Limited in 2005. It was involved in a pump and dump operation, having falsely reported its assets at the time of its market debut.[12][13][14]

History

The company was initially founded as Crown Corporation Limited (CCL) in Bermuda and became publicly traded on London's Alternative Investment Market (AIM) in October 2003. Its primary objective was to acquire struggling businesses, improve their performance, and subsequently sell them for profit. Lambert Financial Investments acquired a 59% stake for $570 million, which included a $275 million certificate of deposit from Banco do Brasil—a deposit later revealed to be fraudulent, as the funds were never actually transferred. Additionally, other investors failed to fulfill their payment obligations for shares. Despite evident financial shortcomings, CCL provided investors with misleading information about its fiscal status, making increasingly inflated assertions.

In June 2005, Stuart Pearson, a British business leader and head of Langbar Capital, became involved in an intricate scheme aimed at persuading him of the company's financial authenticity. The two entities merged, adopting the name Langbar International.

Following Pearson’s public announcements that funds had been released from Brazil, Langbar International’s market value increased, drawing further investment interest. Nevertheless, trading was halted in October amid growing skepticism regarding the company's true worth, which ultimately resulted in its downfall.

Investors—particularly those who joined after Pearson's involvement—suffered losses totaling up to £100 million. In 2007, London advisory firm Nabarro Wells was penalized £250,000 due to inadequate due diligence practices. Subsequently, in 2008, shareholders of Langbar initiated legal action against Rybak and his family, culminating in a £30 million settlement after protracted litigation.

The Serious Fraud Office aggressively pursued those involved in the conspiracy, executing multiple arrests across Spain and Switzerland before the key figurehead, Lambert’s leader Avi Arad, passed away from a heart attack. This development shifted investigative attention toward Pearson during the final phase.

Pearson faced prosecution on 13 fraud charges related to his knowledge and awareness of the deceit. Despite receiving warnings—including a direct denial from Banco do Brasil regarding receipt of Lambert’s funds—he was convicted in 2011 on three counts for making misleading or reckless statements about the existence of the funds. His sentence included one year of imprisonment and a five-year prohibition from holding directorship positions. The SFO determined that asset confiscation was not feasible because Pearson was found guilty of recklessness rather than intentional dishonesty and had personally experienced financial losses.

This prominent fraud case prompted stricter regulatory measures for companies listed on AIM.

External links

  1. ↑ "Serious Fraud Office Press Releases 29 November 2005". Sfo.gov.uk. Archived from the original on 29 September 2011. Retrieved 1 January 2012.
  2. ↑ Simon Bowers (26 November 2005). "Fraud inquiry starts into shell firm's missing millions". The Guardian. UK. Retrieved 1 January 2012.
  3. ↑ Blackwell, David (26 November 2005). "Langbar face SFO probe over possible missing cash". Financial Times. Retrieved 1 January 2012.
  4. ↑ Robert Miller (26 November 2005). "SFO inquiry on way into fall of Langbar". The Daily Telegraph. UK. Retrieved 1 January 2012.Template:Fix/category[dead link]
  5. ↑ "Accountancy Investigation & Disciplinary Board Press Release 23 June 2006". Frc.org.uk. 23 June 2006. Archived from the original on 4 January 2012. Retrieved 1 January 2012.
  6. ↑ "Langbar sues over missing £365m". BBC News. 13 March 2006. Retrieved 1 January 2012.
  7. ↑ Simon Bowers (14 March 2006). "Langbar accuses two ex-directors of 'conspiracy to defraud'". The Guardian. Retrieved 1 January 2012.
  8. ↑ James Bagnall (14 March 2006). "Langbar launches $477m claim". The Ottawa Citizen. Archived from the original on 10 November 2012. Retrieved 1 January 2012.
  9. ↑ Nicholas Neveling (14 March 2006). "Langbar launches action against former directors". Accountancy Age. Retrieved 1 January 2012.
  10. ↑ "Langbar launches legal challenges" Investors Chronicle 17 March 2006 Archived 25 July 2011 at the Wayback Machine
  11. ↑ Tait, Nikki (22 December 2006). "Holders launch Langbar claim". Financial Times. Retrieved 1 January 2012.
  12. ↑ Greg Hurst; Caroline Merrell (1 December 2005). "Langbar chief in investor talks over 'missing £365m'". The Times. UK. Archived from the original on 12 June 2011. Retrieved 1 January 2012.
  13. ↑ Greg Hurst; Paul Durman and Louise Armistead (4 December 2005). "A Crown farce: how Langbar mislaid £365m". The Sunday Times. Archived from the original on 12 June 2011. Retrieved 1 January 2012.
  14. ↑ Jivkov, Michael (26 November 2005). "AIM becomes victim of £365m fraud". The Independent. UK. Archived from the original on 27 April 2006. Retrieved 1 January 2012.

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