In a key legal battle that could have huge implications for Sipp providers, The Financial Ombudsman (FOS) has argued the firm failed to perform the required due diligence on its unregulated investments.
Berkeley Burke, a former self-invested personal pension provider, is fighting a 2014 FOS decision which stated that it had to compensate a client after it failed to perform necessary due diligence on the client’s investment.
The investment revolved around an unregulated investment scheme Sustainable Agro Energy, which sold plots of land in Cambodia where trees would be planted to create bio-fuel.
The client, Wayne Charlton, was out of pocket £29,000 after the scheme was found to be fraudulent.
FOS have argued that Berkeley Burke SIPP Administration failed to carry out the proper due diligence. If the court rules in favour of the FOS it could have massive consequences for other SIPP providers, and how claims against these firms will be treated.
Currently, 77 people have registered to file a claim, pursuing a total of more than £3.7m in lost funds. It is estimated there could be in excess of 1,000 claimants affect by similar issues.
Scott Birchall, Partner at Smooth Commercial Law, commented:
We are seeing more and more complaints like Mr Charlton’s come into our law firm, and each has a similar story.
We agree with the FOS argument that not enough due diligence was completed in relation to many SIPPs. We await the court’s ruling eagerly.
The case is ongoing.
How can Smooth Law Commercial help?
At Smooth Commercial Law, our team of experts have extensive experience in dealing with a whole manner of claims that arise from negligent and/or unsuitable financial advice. We are seeing more and more mis-sold SIPP claims, and have managed to secure compensation for many of our clients.
Should you have a claim, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.
You can contact our experienced team by calling 0800 051 2578 or by emailing email@example.com.