The High Court ruled in favour of the FCA in a civil action against 2 firms and their directors who provided pension services to consumers without FCA authorisation.
The FCA’s case concerned the activities of Avacade Limited (in liquidation) and Alexandra Associates (UK) Limited trading as Avacade Future Solutions (AA) and their directors, Craig Lummis, Lee Lummis and Raymond Fox. The FCA alleged the 2 companies provided a pension report service and made misleading statements which induced consumers to transfer their pensions into self-invested personal pensions (SIPPs) and then into alternative investments such as HotPods (office space available for rent), tree plantations and Brazilian property developments.
More than 2,000 consumers transferred in the region of £91.8m from their pensions into SIPPs. Approximately £68m of that amount was invested in products promoted by Avacade and approximately £905,000 was invested into a product promoted by AA – the Paraiba bond – a fixed rate bond relating to a Brazilian property development. From these investments Avacade and AA earned commissions in the region of £10.8m.
Many of the underlying investments have failed or are in liquidation.
The Court found that Avacade 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.
Avacade entered into creditor’s voluntary liquidation on 6 November 2015.
The FCA is seeking orders from the High Court banning AA, the Lummises and Mr Fox from engaging in unauthorised activities in the UK. The FCA will also be asking the Court to determine the sums that AA and the individuals should be required to pay by way of restitution for their roles in the unlawful activity.
Any Avacade/AA customers who believe they may have lost money and have not previously been contacted by the FCA about this matter, should contact the FCA to provide their details.
