Carey owner delays results to assess Adams ruling

STM Group, the international financial services provider which owns Carey Pensions, has delayed its 2020 year end results following discussions with its auditors after the recent shock Adams v Carey court judgment. The company says the delay will enable it to assess the long term impact of the judgment but it expects any provision to be covered by insurance and indemnities. Earlier this month a Court of Appeal Judge overturned a previous High Court ruling and sided with claimant Russell Adams against Carey Pensions in the long-running and pivotal ‘Adams’ SIPP case. The case involves the question of provider responsibility when accepting investments into a SIPP. Some experts have warned the judgment, unless successfully appealed, could bring £1bn of claims against some SIPP firms. The Court of Appeal unanimously overturned its previous ruling and found that Adams was advised by CLP Brokers, an unregulated introducer based in Spain. The court said that as CLP was not authorised by the Financial Conduct Authority to give investment advice, or make arrangements relating to investments, this was in contravention of the Financial Services and Markets Act 2000. As the SIPP was entered into as a consequence of advice given by CLP, the High Court declared that the SIPP agreement is unenforceable against Adams and he is entitled to recover the money he paid into it as well as compensation to reflect the losses he suffered as a consequence. Carey initially won the case but lost an appeal by Adams side. Carey has since been rebranded as Options, part of STM Group. STM, which has a number of SIPP and pensions interests, says its results, due about now, should now be released in early May. In a statement today the company said: “The delay is due to the ruling in relation to the Adams v Carey case as announced by the company on 1 April 2021. A significant exercise is being carried out to determine whether the ruling has triggered an event which would require a provision, as defined by accounting standards, to be included in the company’s financial statements and, if so, requires audit testing to be carried out. “The inclusion of any such provision within the financial statements is not expected to have any impact on the net asset figure or the results of the business due to the claim being covered by the group’s insurance policy and indemnities. Audit work on all other areas has been substantially completed and no other material adjustments are expected.” STM added that the financial results remain in line with previous guidance given in its trading update on 3 February 2021. The company expects to report 2020 revenues of £24m, EBITDA of £3.6m, profit before tax of £2m and net cash of £15.5m. STM acquired Carey’s SIPP business in 2019 for £400,000. At the time STM said in terms of the Carey court case, it had secured indemnities and the benefit of significant existing PI cover from the sellers of Carey.

Carey owner delays results to assess Adams ruling

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