The High Court has ruled in favour of the FCA in its case against pension introducers Avacade and Alexandra Associates.
The FCA have this week won a High Court battle against two “unlawful” pensions introducers who were responsible for £92m worth of exotic investments, including Latin American tree plantations.
Avacade and Alexandra Associates first made headlines in 2016 when an investigation revealed it was selling investments in the now collapsed Costa Rican plantation scheme, Ethical Forestry.
What did the unregulated introducers do?
The FCA filed civil proceedings against the two firms in November 2017 when it alleged they:
Made misleading statements;
- Carried out regulated activities in the UK without FCA authorisation;
- Made financial promotions without the required authorisation
Both firms claimed to provide a pension report service. This was marketed at summarising a consumer’s pension information and retirement objective to help them decide what to do with their retirement assets.
The firms, which traded as Avacade Investment Options and Alexandra Associates before entering liquidation, then promoted self-invested personal pensions (SIPPs) and investments in alternative investments such as the tree plantations, the FCA said.
More than 2,000 investors affected
The FCA have stated that more than 2,000 consumers transferred £91.8m from their pensions into Sipps sold by Avacade and Alexandra Associates. Most of these investments are now in liquidation, they added.
By selling these failed investments, the two firms earned commissions in the region of £10.8m. The FCA added:
Approximately £68m of that [£91.8m] amount was invested in products promoted by Avacade and approximately £905,000 was invested into a product promoted by Alexandra Associates – the Paraiba bond – a fixed rate bond relating to a Brazilian property development.
Mark Steward, executive director of enforcement and market oversight at the FCA, said of the matter:
The actions of those involved put the pension savings of thousands of people at risk. We will now seek restitution for them.
Unregulated introducers, like Avacade, often try to skirt regulation by making false claims about the kind of service they provide.
We urge consumers to avoid unregulated firms offering any kind of free pension review and only deal with firms that appear on the FCA register and who are permitted to provide pension advice.
The FCA is now pressing the High Court to ban the directors of the introducers, Craig Lummis, Lee Lummis and Raymond Fox, from engaging in unauthorised activities in the UK. They are also asking the court to determine how much restitution the trio should be required to pay out to investors.
How can Smooth Commercial Law help?
Have you been a victim of Avacade’s or Alexandra Associate’s financial mis-selling? Smooth Commercial Law may be able to help you claim compensation.
At Smooth Commercial Law, our team of experts have experience in dealing with a whole manner of claims that arise from negligent, fraudulent and/or unsuitable financial advice, including unsuitable transfers from pensions. We are seeing an increase in claims for mis-sold pensions and unsuitable investments, and have managed to secure compensation for many of our clients.
Should you have a claim for negligent financial advice, 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.