The investigation follows complaints from the clients’ new IFA, Julian Pruggmayer of Financial Risk Management.
A spokesperson for Sesame said: “We operate to the highest regulatory standards and we are now conducting a thorough investigation into this matter. As this case is ongoing it would not be appropriate to comment further at this stage.”
Mr Pruggmayer told FTAdviser that an AR of Sesame converted two of his clients’ funds into self invested personal pensions and then invested a total of £54,000 into a holiday complex called Paradise Beach in Cape Verde being marketed by Arck LLP.
Two senior members of Arck have been arrested by Nottinghamshire Police over allegations of fraud. Today (26 March), the FSA issued a supervisory notice on one of the Sipp operators, HD Administrators.
Regulatory Legal, which is representing over 100 investors and advisers in relation to Arck, told FTAdviser that this part of a £60m fraud.
Sipp provider Greyfriars Asset Management previously told FTAdviser that it has sent out a warning letter to its self-invested personal pension clients and spoke to IFAs who recommended certain investments by Arck.
Mr Pruggmayer took the case to Sesame as the IFA was an AR. Following this he took the case to the FSA highlighting that the investments were unregulated.
He said: “He put these two clients’ funds in to self invested personal pensions. Why? This holiday complex has not been completed and could be part of a wider fraud scam. That aside, this is a very risky investment. Will it get finished? What about currency movements?
“I sent the IFA a letter informing him of all of this but he has not contacted me. As this is an unregulated scheme, it is not protected by the Financial Ombudsman Scheme nor the Financial Services Compensation Scheme.”
The FSA has now issued a supervisory notice to Sipp provider HD Administrators, in which it states that the two approved persons, Kathryn Clark and Michelle King, “do not appear to be fit and proper”.
Mrs Clark was arrested by Nottinghamshire Police on 2 March 2012 on suspicision of fraud by false representation and money laundering in relation to Arck LLP. The other managing member, Richard Clay, was also arrested.