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February 20, 2024

FCA secures bankruptcy orders against Avacade Directors

The Financial Conduct Authority (FCA) has secured bankruptcy orders against two directors of Avacade, following a High Court order.

Avacade, Alexandra Associates and their directors were ordered to pay £10.7 restitution in 2020 following the outcome of a case brought by the FCA.

Avacade was responsible for £10m of this amount and Alexandra Associates for £715,000.

However, the defendants failed to satisfy the restitution order. As a result, on November 21, 2023, the FCA secured bankruptcy orders against Lee and Craig Lummis.

The third director of Avacade, Raymond Fox, was previously made bankrupt in August 2020.

The FCA said the Official Receiver (or a Trustee in Bankruptcy) will investigate the financial affairs of the bankrupts and administer their estates.

 

Why did the FCA take action against Avacade?

The FCA took action against Avacade and Alexandra Associates for allegedly arranging and promoting investments without FCA authorisation.

The Regulator also said they had made false and misleading statements which ‘induced’ people to transfer their pensions into SIPPs and then into alternative investments. These investments included tree plantations and Brazilian property developments.

More than 2,000 clients transferred around £91m, over two-thirds of which was invested in products promoted by Avacade and Alexandra Associates.

According to the regulator, Avacade and Alexandra Associates received over £10m in commissions.

 

What happened to Avacade, Alexandra Associates and their directors?

In August 2020 the High Court issued a verdict against “illegal” pension introducers Avacade, Alexandra Associates, and their respective directors.

The decision was upheld by the Court of Appeal in 2021.

The court found the directors were ‘knowingly concerned’ in the breaches made by Avacade and Alexandra Associates.

The directors were also ordered to pay restitution, with Craig and Lee Lummis told to pay £2.5m each and Raymond Fox to pay £1.7m.

The ruling also resulted in Alexandra Associates and all three directors being banned from engaging in regulated activities in the UK without authorisation, making financial promotions, and making false or misleading statements about regulated investments

The FCA secured a winding-up order against Alexandra Associates (UK) in February 2022 which resulted in the dissolution of the company in April 2023.

Avacade is currently in liquidation.

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