UK High Court orders illegal pension introducers to pay £10m restitution to consumers
In a case brought by the FCA, the High Court has ordered two companies and three individuals to pay a total of £10,715,000 in restitution to members of the public who were induced to transfer their pensions into self-invested personal pensions (SIPPs).
The order was made on 7 August against Avacade (in liquidation), Alexandra Associates (trading as Avacade Future Solutions), Craig Lummis, Lee Lummis and Raymond Fox.
In a judgment dated 30 June 2020, the Court found that Avacade's and AA's activities were unlawful as they had engaged in the regulated activities of arranging and advising on investments, made unapproved financial promotions through their websites, promotional material and in telephone calls to consumers and made false or misleading statements. The Court also found that the Lummises and Mr Fox were knowingly concerned in Avacade's and AA's breaches.
The FCA will make wrongdoers financially accountable to consumers whom, as the Court recognises in this decision."
A further hearing took place on 31 July to determine the amounts the Defendants should pay in restitution for their roles in the unlawful activity.
The Court ordered the Defendants to pay the following sums in restitution: £10,000,000 (Avacade), £715,000 (AA), £2,500,000 (Craig Lummis), £2,500,000 (Lee Lummis) and £1,700,000 (Raymond Fox).
Additionally AA, the Lummises and Fox have been banned from engaging in regulated activities in the UK without authorisation, making financial promotions and making false or misleading statements about regulated investments.
Mark Steward, the FCA's executive director of enforcement and market oversight, said: "The FCA will make wrongdoers financially accountable to consumers whom, as the Court recognises in this decision, '…include elderly and vulnerable citizens who have paid their due share of income tax, made sacrifices, and taken prudential decisions for their future retirement over the course of an honest working life."
Subject to any appeals against the judgment, the FCA said it will take steps to recover monies from the Defendants, so that it can return them to the investors.
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