Adviser duo prohibited as they “did not detect the risk that the Ucis were routinely being promoted to ineligible consumers”.
The Financial Conduct Authority has imposed fines of £28,000 each on two advice firm compliance heads and banned them from performing significant influence functions at any FCA-regulated firm.
John Leslie and Jeffrey Bennett held controlled functions at two London-based financial advisory firms, Leslie and Nuding (now known as Leslie & Swallow) and Burlington Associates Ltd.
During 2005, both firms assisted in the promotion of three unregulated collective investment Schemes to retail investors in the UK, the FCA said. Over 800 people invested around £30m in the three Ucis, which subsequently failed.
The two were responsible for overseeing the regulated activities of their respective firms and monitoring compliance with statutory and regulatory requirements. After conducting full investigations, the FCA found that both “failed to exercise due skill, care and diligence in their positions”.
They did not identify the extent to which their firms were involved in promoting the Ucis and they did not detect the risk that the Ucis were routinely being promoted to ineligible consumers, it added.
The duo stood to receive fines of £40,000 each, but they settled their cases at an early stage entitling them to a 30 per cent discount under the FCA’s settlement process. Other enforcement proceedings connected to these matters are on-going, the regulator stated.
Bill Sillett, head of FCA retail enforcement, said:
“The lax attitude of Leslie and Bennett to their duties was particularly unacceptable when you consider that their firms were involved in promoting the Ucis to thousands of mainstream retail consumers.
“This is another example of why we are toughening the rules around how such schemes can be promoted.”
Any Ucis investors who had dealings with Leslie & Nuding (which also traded as Burlington Funds) and/or Burlington Associates may need to seek independent advice about their rights and options, the FCA said.
In June this year, the FCA published final rules to ban the promotion of Ucis and certain close substitutes to the vast majority of retail investors in the UK.
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