The high court has ruled in favour of the FCA in a civil action case brought against two unregulated introducer firms and their managing directors.
Avacade Limited and Alexandra Associates – along with their directors Craig Lummis, Lee Lummis and Raymond Fox – were accused of providing unlawful pension advice, making unapproved financial promotions and making false or misleading statements.
The FCA case centred around the pension report service both companies provided and the alleged unregulated conduct which “induced” clients to transfer their pensions into SIPPS and then into alternative investments such as tree plantations and a Brazilian property development.
More than 2000 consumers transferred around £91m and over two-thirds of that amount was invested in products promoted by Avacade. Nearly £1m went into Paraiba bond – a Brazilian property development promoted by Alexandra Associates.
According to the regulator Avacade and Alexandra Associates received over £10m in commissions.
Many of the underlying investments have now failed or are in liquidation.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
“The actions of those involved put the pension savings of thousands of people at risk. We will now seek restitution for them.”
We’ve previously highlighted the role of introducers in mis-selling and the trend which saw many investors targeted through cold calls offering free pension reviews.
These pension reviews were in fact little more than commission driven marketing exercises, designed to persuade people to transfer their pension funds.
With promises of higher returns than existing schemes and the true risk of the investment often played down; it’s no wonder so many people believed they were doing the right thing.
Whilst steps such as banning cold calling have helped deter some introducer firms from continuing these tactics; sadly, it’s unlikely to put a stop to companies who make money from commissions regardless of consumer detriment. Not to mention the companies that are operating outright scams targeting people’s pensions.
The FCA has a useful guide to keeping SCAM SMART on their website.
Other Introducer firms known to have been connected with mis-selling are Jackson Francis and CL&P – a firm at the heart of many compensation claims surrounding Storefirst storepods, as well as the recent high court case involving SIPP operator Carey.
If you received a pension review out of the blue or transferred into a SIPP which is not performing as you were led to believe you’d be wise to check if you’ve been mis-sold.
We provide a free no obligation check to anyone who thinks they may have been mis-sold and can usually identify from a few basic details whether you have a case or not.
We will also answer any questions and explain all the options available to you should you wish to pursue your claim.
Call 0114 2664216 or fill in the form to arrange a call back.
You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.
It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.