The Financial Conduct Authority revealed some 2,000 consumers have been affected.
Unregulated introducers Avacade Limited and Alexandra Associates are responsible for transferring “at least” £86m in pension assets, according to the Financial Conduct Authority (FCA).
What did the unregulated introducers do?
The regulator 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 tree plantations, the FCA said.
The FCA steps in
The FCA said it believed when performing the service, Avacade promoted self-invested personal pensions (SIPP) and alternative investments such as tree plantations. The regulator believes alternative investments which were promoted specifically include plantations in Costa Rica and the infamous collapsed Cambodian scheme Sustainable Agroenergy.
The previously safe funds were also placed into Ethical Forestry, Global Plantations and, in some cases, InvestUS, a sub-prime housing re-po scheme. The schemes have all failed and amassed significant complaints and claims from investors.
This month, the FCA wrote to pension transfer introducer clients over the legal action that is being taken.
In November 2017, the FCA said it would start civil proceedings against Avacade Limited and its three directors Craig Lummis, Lee Lummis and Raymond Fox.
The FCA’s letter, dated 14 November 2018, confirms legal proceedings began in September 2017 and will consist of two trials; the first to prove liability; a second to determine the amount of losses suffered by investors.
The first trial is due to commence in January 2020 after a timetable was set in August this year.
Mark Steward, FCA director of enforcement and market oversight, stated
The FCA is seeking injunctions, declarations and restitution orders to prevent further breaches in schemes which were unlawfully promoted to the public using false, misleading and deceptive statements.
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 an increase in claims for mis-sold pensions, 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 the number at the top of this page or by emailing info@smooth-commercial-law.co.uk.