Pensions  

Introducer appeal case against FCA heard in court

Introducer appeal case against FCA heard in court

The Court of Appeal has started proceedings brought by unregulated introducer Alexandra Associates UK and its directors against the regulator over the troubled transfer of £92m pension assets.

The hearing started today (July 7) and is expected to last until tomorrow.

Introducer Alexandra Associates UK and directors Craig Lummis and Lee Lummis were granted permission to appeal their case back in December after Lady Justice Asplin allowed the appeal on two grounds.

One related to the correct interpretation of the law that governs ‘making of arrangements’ and the other concerned the High Court’s interpretation of ‘independent advice’ and ‘introducing’.

In the judgment handed down in June last year, 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 August, the High Court ordered the two introducers and their managers to pay back £10.7m to clients who were missold pensions.

Omid Khub of Zachary Khub Solicitiors, who acts on behalf of Alexandra Associates' Craig Lummis and Lee Lummis, wants the Court of Appeal to clarify the regulatory issues in this case which arise out of the application of the Financial Services and Markets Act 2000.

Khub said: “This saga relates to the relationship between unregulated introducers and FCA regulated IFAs and pension providers. 

“It has always been the case that our clients’, as introducers, ought not to have been singled out and be held solely responsible for the losses alleged to have been suffered by investors, and that the FCA ought to have also brought legal action against the regulated Sipp companies and IFAs who placed the investor in those investments.  

“The FCA has never given a satisfactory explanation for its unfair refusal to include those companies involved, in these court proceedings, especially having regards for the fact that they played a significant part in placing the investors into those investments, now complained of.  

“Our clients have always maintained that they introduced the UK consumer to FCA regulated IFAs and FCA regulated Sipp providers to advise the UK consumer independently and to apply their own discretion to any investment decision.”

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.

According to the regulator more than 2,000 clients transferred in the region of £91.8m from their pensions into Sipps. 

Avacade entered into creditor's voluntary liquidation in November 2015 and therefore is unable to join the appeal.

amy.austin@ft.com

What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know