High Court rules in favour of FCA in pensions introduction case

The High Court ruled in favour of the FCA in a civil action against two firms and their directors who induced clients to transfer their pensions in SIPPs and alternative investments without FCA authorisation. The case concerned Avacade Limited and Alexandra Associates trading as Avacade Future Solutions (AA) and their directors Craig Lummis, Less Lummis and Raymond Fox. The FCA said that the two companies provided a pension report service and made misleading statement to induce customers to transfer their pensions into SIPPs and then into alternative investments such as HotPods, tree plantations and Brazilian property developments. Over 2,000 people transferred in the region of £91.8m from their pensions into SIPPs. Approximately £68m of that amount was invested in products promoted by Avacade and approximately £905,000 was invested into a product promoted by AA – the Paraiba bond – a fixed rate bond relating to a Brazilian property development. Avacade and AA had earned commissions in the region of £10.8m. Many of the investments have failed or are now in liquidation. Avacade entered into creditor’s voluntary liquidation on 6 November 2015. The FCA has sought orders from the High Court banning AA, the Lummises and Mr Fox from engaging in unauthorised activities in the UK. The FCA said it will also be asking the Court to determine the sums that AA and the individuals should be required to pay by way of restitution for their roles in the unlawful activity. 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. "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 which appear on the FCA register and who are permitted to provide pension advice." {loadmoduleid423)

High Court rules in favour of FCA in pensions introduction case

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