Regulation  

Advisers banned by FCA over £17m fraud

Advisers banned by FCA over £17m fraud

A pair of advisers who were jailed for a £17m fraud on elderly and vulnerable clients have been banned by the Financial Conduct Authority.

In final notices issued by the City regulator, brothers Alan and Russell Taylor, who ran Taylor & Taylor Associates in Norwich, were prohibited from performing any function in relation to regulated activity.

The FCA deemed the brothers not to be fit and proper persons given they were convicted and imprisoned for committing fraud, with the enforcement and market oversight division’s Anna Couzens stating this was because their conduct demonstrated a clear and serious lack of honesty, integrity and reputation.

On 6 March 2018, the two men were convicted at Norwich Crown Court for one count each of conspiracy to defraud. They were later sentenced for a combined 11 years in prison and disqualified from being company directors for 12 years each.

They were both given a 20 per cent reduction of their sentences for pleading guilty early enough to save prosecution time and resources.

In his sentencing remarks, Judge Anthony Bate said the brothers’ culpability and responsibility were high, adding: "This was an elaborate and prolonged joint breach of trust against a large number of your own loyal clients, most of whom were already pensioners or soon to become so."

Through their firm Taylor & Taylor, the brothers targeted retirees, or those approaching retirement, to persuade them to invest in a high-risk scheme called the Vantage Trader fund.

More than £17.2m from 237 clients was invested in the Vantage fund between 2008 and 2015, Norwich Crown Court was told.

The brothers spent their profits on hiring a private jet for more than £150,000, a boat worth more than £50,000 and an exclusive timeshare costing £260,000.

They also bought several Patek Philippe and Rolex watches worth tens of thousands of pounds each.

The men would tell their victims their investment scheme was safer than the savings they already had, but in reality it was high risk and the clients' money was placed in contracts for difference.

Contracts for difference are contracts between an investor and an investment bank or a spread-betting firm.

At the end of the contract, the parties exchange the difference between the opening and closing prices of a specified financial instrument, including shares or commodities.

Taylor & Taylor owned the fund in question so were making money from these investments but failed to pass this information on to their clients.

Upon the brothers’ conviction, Anamarie Coomansingh, a specialist prosecutor at the Crown Prosecution Service, said: "Alan and Russell Taylor took over their father's business and used his client lists to target victims who trusted them to invest their money wisely.

"The scheme they chose was not a surety to increase pension pots, as the Taylors told their victims, but was similar to gambling their clients' futures on the spin of a roulette wheel.

"One victim unknowingly invested £200,000 in the scheme and was left with just over half of that amount. Others had to take up part-time jobs to help them through retirement as a result of the impact on their finances.