Financial Conduct Authority  

Judge refuses to suspend £86m FCA advice trial

Judge refuses to suspend £86m FCA advice trial

The High Court has refused to delay the start of a trial against two unregulated introducers and their managers over the transfer of £86m in pension assets, after one of the defendants claimed he was in poor health.

The case was initially brought by the Financial Conduct Authority in 2017 over alleged pensions mis-selling.

The regulator alleged unregulated firms Avacade Limited and Alexandra Associates had provided a pension report service that had crossed the line to pensions advice.

The firms, which traded as Avacade Investment Options and Alexandra Associates before entering liquidation, then promoted self-invested personal pensions (Sipps) and investments in alternative assets such as tree plantations, according to the FCA.

The regulator alleged the firms made misleading statements to consumers, and carried out regulated activities in the UK without authorisation.

The FCA further alleged that “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.”

But in a court case last week (January 8), Craig Lummis sought an order to adjourn the trial date on the basis that he was medically unfit to stand trial.

The trial was scheduled to be heard in a window commencing January 13, 2020 and is expected to last 19 days.

Craig Lummis claimed that he was suffering from severe adjustment disorder and his ill-health was preventing him from properly participating in the proceedings.

A letter from one of his doctors stated: “Patient presents with acute depressive symptoms and suicidal ideation secondary to stress related to upcoming court proceedings.

“In my opinion, any forthcoming trials in the three-month period would be detrimental to his health and he should not attend trial.”

Craig Lummis argued that as he was not in a position to attend trial on the basis of his ill health and advice from his doctors, non-participation will mean that he is not able to comment on the proceedings and will not be able to cross-examine the FCA’s own witnesses.

He claimed: “All of this will lead to basic unfairness, and any judgment will almost certainly be subject to an appeal.

“It will be much better to avoid such complications by adjourning proceedings now to allow the proposed course of treatment to take place.”

The FCA argued that his application was made “extremely late” and an adjournment would waste costs, court time and resources.

The FCA’s position is that as a result of the actions of Avacade and Craig and Lee Lummis, consumers had transferred more than £86m in pension funds into Sipps and that £70m was then invested into investments which have failed.

Due to this, Judge Adam Johnson found there to be an “obvious public interest”.

Judge Johnson said: “It is certainly a highly unattractive proposition to subject the proceedings at this late stage to a substantial period of further delay.