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Investment Scam

Graphene: U.K. regulator warns investors against buying the carbon material

by Melody M. Bomgardner
January 6, 2014 | A version of this story appeared in Volume 92, Issue 1

It may not be a Ponzi scheme or swampy real estate deal, but it’s a swindle all the same. Shady brokers in the U.K. are trying to entice vulnerable investors to buy a new commodity: graphene.

The Financial Conduct Authority, the U.K.’s financial services regulator, warned last week that the investments being offered involve “a strong possibility of fraud.” Graphene, atom-thick sheets of carbon commonly made from graphite, has potential applications in display screens, flexible electronics, and batteries. In the scheme, investors are offered a portion of a graphene stockpile that would be sold at a later date for a higher price.

But many products referred to as “graphene” are actually other forms of graphite, FCA says. What’s more, prices for true graphene are already decreasing as firms have made more of it.

Research on graphene has attracted a great deal of interest in Europe. In 2012, the U.K. government said it would spend $83 million to create a graphene R&D hub. Last October, the European Commission announced a $1.3 billion investment over 10 years in graphene research.

“There are a lot of tremendous opportunities for graphene—there is reason to be excited,” says John S. Lettow, president of Maryland-based Vorbeck Materials, a producer of graphene and graphene inks. “But in the last two years, the price of our inks has dropped by more than half.” Lettow sees opportunities to invest in firms that make or use graphene, but graphene itself will not be a scarce resource.


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