A law firm has launched a new legal challenge against embattled Sipp provider Carey Pensions over allegations it failed to undertake the required due diligence when accepting Sipp investments.
Anthony Philip James & Co is bringing the case on behalf of Mr R, who lost £30,000 after investing into Green Oil Australia through the Carey Pensions Sipp.
The new litigation comes as earlier today it was announced Carey Pensions is being sold to pensions provider STM Group and is currently waiting for another crucial court ruling over separate allegations it missold a Sipp to a client.
Carey Pensions claimed it did not break conduct of business rules when it set up a Sipp for a client during a High Court hearing in March.
In that case, lorry driver Russell Adams alleges Carey Pensions missold him a Sipp in February 2012, when he was paid an inducement of £4,000 into his savings account to encourage him to put money into rental scheme Store First.
The case is seen as a pivotal ruling on whether Sipp providers should take responsibility for unsuitable investments.
In the latest case, APJ says inexperienced investor Mr R made the choice to invest based on advice from an unregulated introducer who cold called him.
He invested into Green Oil Australia, an unregulated collective investment scheme that has now failed.
In 2015, Mr R brought his case to The Pensions Ombudsman who found he was poorly advised by the unregulated introducer and that it was questionable whether a Sipp was the appropriate pension vehicle for a fund of £30,000 or if Green Oil Australia was a suitable investment in his circumstances.
The Ombudsman found the FCA guidance that Sipp providers monitor and bear responsibility for the quality and type of business introduced to them did not apply in Mr R’s case.
APJ say this directly conflicts with the FCA’s submission to the court in an ongoing judicial review over another case of Sipp provider responsibility, Berkeley Burke, arguing the court should find Mr R is owed compensation by Carey Pensions for his losses.
APJ solicitor Glyn Taylor says: “In their written submission in the Berkeley Burke judicial review, the FCA specifically states that at all material times, the Financial Services Authority’s thematic review report in 2009 highlighted that the failure to undertake due diligence is a breach of the regulatory rules to act honestly, fairly and professionally.
“We expect the court to uphold the decision made against Berkeley Burke, therefore we are confident that a court will also find Mr R was failed by Carey Pensions.”
Carey Pensions says no formal court proceeds have brought to it yet so it has no knowledge of the case and cannot comment.
Other embattled Sipp providers that are also facing challenges for their role in cases involving unregulated investments include Liberty Sipp.
In September the Financial Ombudsman Service ordered Sipp administrator Guinness Mahon Trust Corporation to pay out compensation over non-standard investments.