FCA takes action on fourth firm in unprotected investment group

FCA takes action on fourth firm in unprotected investment group

The Financial Conduct Authority has removed permissions from a fourth firm in a “connected” group of companies offering unprotected investments

The FCA has removed permissions from Grosvenor Associates, a credit broker firm it authorised in March, over concerns about investments it may have been offering.

The regulator said Grosvenor was linked to Marvell Enterprises, another credit broker it removed the permissions of last month after authorising the firm in January.

The FCA said: "Marvell appeared to have been carrying out investment activities for which it did not have permission and consumers may have invested substantial sums in bonds or loan notes issued by Marvell.

"Consumers may have been misled about the scope of Marvell’s permissions and the protection afforded to their investments. Due to this connection, we are concerned that Grosvenor may also be offering investments to customers."

The FCA said Marvell and Grosvenor "may be connected" to two other firms which the FCA has taken action against - Sentor Solutions Commercial and Cavendish Incorporated.

In September Sentor was prevented by the FCA from carrying out any regulated activites without prior written consent from the regulator.

Cavendish Incorporated was subjected to the same restriction in August.

All four firms were authorised by the FCA to conduct credit broking activities.  

The regulator added: “We believe that [Grosvenor, Marvell, Sentor and Cavendish], and the investments they may have been offering, may be connected. 

“We encourage customers to be extra vigilant when approached by an authorised credit broking firm offering investments.”

Whilst businesses don’t have to be regulated by the FCA to raise funds, any investment services provided by firms regarding these investments should be regulated and subject to the FCA’s rules.

Grosvenor was never permitted by the FCA to provide regulated investment services.

This means, the FCA said, that any investments it offered could pose significant risks to consumers due to the potential lack of regulatory protection that would otherwise be afforded to them.

“When Grosvenor was authorised it did not disclose Marvell’s involvement to us or in other publicly available documentation,” the regulator said. 

"We have attempted to engage with Grosvenor to understand their connection to Marvell, but they have not responded to us. We believe that there is a significant risk that Grosvenor may have offered, or been intending to offer, investments to customers which were not protected.”