Unregulated introducer has appeal bid rejected

Unregulated introducer has appeal bid rejected

The judge in the FCA's case against two unregulated introducers and their managers over the transfer of £92m in pension assets has rejected a call for an appeal, but agreed to recuse himself on the grounds there is a conflict of interest.

Introducer Alexandra Associates has been told it cannot bring its appeal against a verdict handed down in the High Court last month, which found it had unlawfully advised on investments and made unapproved financial promotions.

The introducer told FTAdviser it would now take up the matter directly with the Court of Appeal.

Meanwhile Judge Johnson has agreed to step down from any future proceedings after it emerged he is an equity partner in law firm Herbert Smith Freehills, which is working with the FCA on a current test case.

Omid Khub of Zakery Khub Solicitors, legal representative of Craig Lummis, Lee Lummis and Alexandra Associates, said: "We are disappointed that the Judge did not give us permission to appeal his decision. We intent to take the matter to the Court of Appeal in order to seek much needed clarity on this area of law.”


Mr Khub added: "We welcome the decision by the Judge who, on our application and following a hearing, agreed to step down from hearing any future proceedings in this case, including the second trial of quantum. 

"The Judge clearly agreed that it would be inappropriate for him, as an equity partner of HSF, to continue to be sitting as a Judge going forward."

Judge Johnson said he was only made aware of this conflict of interest shortly before he delivered his judgment which found both introducers, Alexandra Associates and Avacade, had unlawfully persuaded pension savers to invest millions of pounds into high risk schemes.

In his witness statement Lee Lumis had argued Judge Johnson cannot continue with the case, which involves a second stage hearing to deal with remedies and any interim orders, as he cannot be seen to be independent.

Mr Lummis said: “A reasonable, independent and impartial court established by law must surely be truly independent and it is now our complaint that, going forward, the learned deputy cannot be said to be truly independent.”

Herbert Smith Freehills has been approached for comment.

Judge Johnson’s verdict

In Judge Johnson’s judgment handed down at the end of last month (June 30), the High Court found the activities of unregulated introducers Avacade Limited and Alexandra Associates were unlawful as they had advised on investments, made unapproved financial promotions and made false or misleading statements.

In the pension mis-selling case brought by the FCA, the regulator alleged the firms had provided a pension report service that had crossed into pensions advice.

The firms then promoted self-invested personal pensions and investments in alternative assets such as tree plantations and Brazilian property developments, according to the FCA.

The FCA further alleged that managers “Craig Lummis, Lee Lummis and Raymond Fox were each knowingly concerned in Avacade’s breaches and Craig Lummis and Lee Lummis were each knowingly concerned in Alexandra Associate’s breaches.”