FSCS places wealth manager under investigation

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FSCS places wealth manager under investigation

The Financial Services Compensation Scheme has placed wealth manager Pello Capital Ltd under investigation. 

The firm was placed in creditors voluntary liquidation by its directors in December last year. 

The firm, which offers stockbroking, online share dealing, foreign exchange trading, corporate broking and pensions, was authorised by the Financial Conduct Authority from 2007 up until mid November 2022.

The decision by the directors of Pello to place the firm in liquidation followed action taken by the FCA to place requirements on Pello which stopped it from conducting regulated activities and restricting it from disposing of assets.

Adam Stephens and Mark Ford of Evelyn Partners have been appointed special administrators of Pello.

Since 2018, four cases have been brought against Pello Capital through the Financial Ombudsman Service. 

Two cases relating to investment advice, one in 2018 and one in March 2020 were not upheld. 

However two subsequent cases, one in June 2020 and one in November 2021 were upheld. 

The June 2020 case related again to unsuitable investment advice. Pello was ordered to compensate a client over advice relating to a £29,000 investment. 

The November 2021 case related to unsuitable investment advice and to a "fraudulent withdrawal" from a client’s account.

In this case, the Fos ordered Pello to compensate the client for the unsuitable investment advice and to put him back in the position he would have been in but for Pello’s withdrawal error.

The fraudulent withdrawal was the result of the client being victim to a scam by persons hacked into his email service. 

The client’s complaint against Pello was that it failed to take reasonable steps to prevent those persons from carrying out the scam, an assertion the Fos agreed with.

The FSCS is now accepting claims against Pello and is working closely with the administrators to investigate whether customers who have submitted claims are eligible for compensation.