FSA bans two directors for marketing investment scheme
Regulator bans two directors for promoting Ucis scheme “without conducting the proper due diligence”.
The Financial Services Authority has prohibited two directors of MNFA Limited, now liquidated, for their involvement in the marketing and promotion of an investment scheme called the “environmentally beneficial plant scheme”.
Richard Rhys has received a full prohibition while Anthony Adams has received a partial prohibition preventing him from performing any significant influence function other than as or through an appointed representative.
Both received these orders for their lack of competence in performing their respective functions, the regulator said.
On behalf of MNFA Limited, Mr Rhys marketed and promoted the scheme without conducting proper due diligence.
As a result, Mr Rhys did not believe that the scheme was an unregulated collective investment scheme, and so did not comply with statutory and regulatory standards required by the Financial Services and Markets Act 2000 and the FSA Handbook.
The scheme had not been described by the designer as a Ucis.
The FSA said that despite being the compliance officer, Mr Adams failed to understand these requirements; Mr Rhys incompetently made misleading statements to investors and failed to take any steps to ensure the suitability of advice to customers.
Bill Sillett, the FSA’s acting head of retail enforcement, said: “The risk of consumer detriment arising from the sale of Ucis has been well documented by the FSA over the last few years. Other advisers that sell, or are considering selling, Ucis may consider it advisable to re-read that information and the details of this case to ensure they are compliant with the relevant rules.
“This particular case emphasises the need for authorised firms and approved persons to ensure they carry out appropriate due diligence on an investment scheme which, although not described as a Ucis in the promotional material, may in fact be one.”
Mr Rhys said: “Whilst I maintain that the FSA has reached the wrong conclusions, in light of the limited findings against me contained within the final notice, I have taken the pragmatic decision not to continue to challenge these findings.
“Since first obtaining FSA approval over a decade ago my record has been unblemished - I have always acted with utmost honesty and integrity and the FSA have not made any findings to the contrary. I have not been fined and have cooperated fully with the FSA throughout their investigation and at all times.”
MNFA Limited was liquidated in August 2011.