£10.7m resti­tu­tion or­dered for in­vest­ment scam vic­tims

The Daily Telegraph - Business - - Business - By

Adam Wil­liams

PEN­SION savers per­suaded to pump their re­tire­ment funds into ul­tra-high risk in­vest­ments will get a £10.7m pay­out fol­low­ing a High Court rul­ing.

Rogue fi­nan­cial ad­vis­ers Ava­cade Fu­ture So­lu­tions and Alexan­dra As­so­ciates (AA) have been or­dered to pay money to mem­bers of the pub­lic who were con­vinced to trans­fer their sav­ings out of se­cure work­place schemes and into highly dan­ger­ous as­sets such as tree plan­ta­tions in Costa Rica and res­i­den­tial devel­op­ments in Brazil.

Court doc­u­ments show that 1,943 in- vestors trans­ferred £87m of sav­ings af­ter en­gag­ing with the firms. Ava­cade earned com­mis­sion and fees worth be­tween 6.3pc and 20.3pc of the money trans­ferred. Vic­tims will likely face large losses de­spite the court award.

The court found that those tar­geted in­cluded el­derly and vul­ner­a­ble peo­ple. A judg­ment in June ruled that Ava­cade and AA had un­law­fully of­fered ad­vice and ar­ranged pen­sions trans­fer when they did not have per­mis­sion to do so.

The two com­pa­nies also used il­le­gal fi­nan­cial pro­mo­tions and pro­vided false or mis­lead­ing in­for­ma­tion to their cus­tomers. Courts have now or­dered the two firms and three di­rec­tors – Craig Lum­mis, Lee Lum­mis and Ray­mond Fox – to pay resti­tu­tion of £10.7m.

The Lum­mises and Mr Fox have been banned from of­fer­ing fi­nan­cial ser­vices to con­sumers, as has AA.

Ava­cade launched liq­ui­da­tion pro­ceed­ings in 2015. The case was brought by the Fi­nan­cial Con­duct Author­ity watch­dog. Mark Ste­ward, en­force­ment di­rec­tor, said: “The FCA will make wrong­do­ers fi­nan­cially ac­count­able to con­sumers.” The FCA has urged any vic­tims who have not al­ready been con­tacted about the rogue pen­sion trans­fers to get in touch im­me­di­ately. Sub­ject to any ap­peals, the reg­u­la­tor will then re­turn cash to in­vestors.

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