A former “senior partner and investment adviser” at restricted advice giant St James’s Place has been banned from regulated activities and fined £300,000 after a tribunal threw out his appeal, according to a notice published online today (16 September).
Peter Carron had worked at SJP between December 2001 and June 2010, and was an appointed representative of the firm between November 2005 and January 2007.
He was found to have abused his position during the period November 2004 to June 2010 by advising clients from his client book to invest in businesses controlled by him, without explaining risks and without disclosing his interest in the firms.
According to a final notice published by the Financial Conduct Authority, Mr Carron directly advised 11 investors to invest a total of £2.4m for Primrose Associates Ltd, Evaluate Technologies Ltd and Comment Technologies Ltd. In total some 32 SJP clients invested a total of £5.7m in the firms.
Many investors were told they would receive a guaranteed return of 10 per cent, while some were told that they would receive a specific sum which amounted to a return of between 9 per cent and 24 per cent per annum.
The FCA stated that Mr Carron continued to push investments in the firms even after it became clear in early 2009 that they were in “financial difficulties”. When they all eventually went into liquidation between June and August 2010, the 11 investors directly advised by Mr Carron had collectively lost around £2.2m.
SJP previously provided £1.9m in redress to affected clients. The FCA did not criticise the firm for any of the wrongdoings identified.
Among other failings which the FCA says constituted a failure to act with honesty and integrity, Mr Carron:
• misled clients into believing the investments were approved, authorised or otherwise endorsed by SJP, which they were not;
• advised clients to invest irrespective of whether the investment was suitable for their needs or consideration as to their capacity for loss;
• failed to provide adequate information including risk warnings; and
• did not communicate which company clients were investing in or what the funds were for, and sometimes moved funds without consent.
The FCA had issued a decision notice in September 2013, and Mr Carron referred the matter to the Upper Tribunal in December 2013. In July the tribunal struck out the appeal following a request from the regulator.
Earlier this year in August, FTAdviser reported Mr Carron had been disqualified from acting as a company director for 13 years by the High Court for misleading investors into investing in Primrose and Comment when they were insolvent.
According to that ruling, as these companies failed approximately 50 investors claimed lost investments in excess of £7.4m.
In 2011 the police dropped an investigation into Mr Carron relating to allegations of fraud. Press Gazette later reported in July 2012 that Associated Newspapers had apologised to Mr Carron and paid “substantial damages” after an article in the Mail on Sunday falsely alleged he had made £5m from what it had described as a ‘Ponzi-style’ fraud.
Tracey McDermott, director of enforcement and financial crime, said: “People go to advisers because they want expert help on how to make the most of their money. They are entitled to expect that their adviser will act in their best interests, not his own.
“Advisers should think very carefully and make clear and full disclosure if they are intending to advise clients to invest in ventures in which they have an interest.”
