£10.7m restitution ordered for investment scam victims
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.