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FCA bans and fines adviser £290k for misleading advice

FCA bans and fines adviser £290k for misleading advice

A former financial adviser has been fined more than £290,000 for recommending high risk unregulated investments to clients and has been banned by the Financial Conduct Authority from performing any regulated activity functions in relation

According to a final notice, published today (20 May), Paul Reynolds recommended a number of “complex and high risk products” to his clients between 2005 and 2010, while he was an approved person at Aspire Personal Finance Ltd.

At that time, many of his clients were on low incomes and had little or no investment experience and Mr Reynolds was aware that he could not justify the suitability of these products, according to the FCA.

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During its investigation the FCA found that Mr Reynolds “recklessly recommended” high risk investment products to eight retail clients in this way.

Clients were unaware that they had invested in unregulated investments and in some cases were not told of the associated risks, the regulator found. The FCA said that suitability letters found on the clients’ files, which did explain the risks, had not been sent and were created “retrospectively”.

Alongside this, he was involved in “retrospectively” creating signatures purporting to be the signatures of two clients on sophisticated investor certification to suggest that Ucis products could be legitimately promoted to them.

Mr Reynolds was also involved in submitting loan facility and investment applications on behalf of a number of his clients, which contained inflated incomes and other false and misleading information.

The FCA also said he was involved in producing inflated valuations to conceal the poor performance of the investments that he had recommended. Mr Reynolds was fined £290,344.

Mr Reynolds referred the FCA’s decision notice to the Upper Tribunal in January 2014, but withdrew this in April of this year.

Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “People should be able to trust advisers to recommend products which will suit their needs.

“Today’s fine reflects the fact that we will not hesitate to take action against firms or individuals who fail to put the best interests of their clients first.”

ruth.gillbe@ft.com