Carey Pensions High Court Sipp claim hots up

Royal Court of Justice High Court 480Lawyers for Sipp firm Carey Pensions have claimed the company did not break conduct of business rules when it set up a Sipp for a client, in a High Court dispute being heard this week.

In the 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.

He subsequently transferred £50,000 into a StoreFirst investment on 12 June 2012.

On the first day of the trial, 19 March, Judge Marc Dight said the case could shape the handling of missold Sipp claims.

Adams says Spain-based unregulated introducer Commercial Land and Property Brokers advised him to put money into the high-risk investment to get a “good return”.

Legal representatives for Adams allege the relationship breached conduct of business rules and he was not told how risky the investment was.

Sipp provider faces uncertain future as more complaints come in

But legal representatives for Carey Pensions argue the conduct of business rules have been “misapplied in the case”.

Furthermore, they claim any guidance from the FCA about the responsibility of Sipp providers after 2012 should not be used in this case.

When questioned by lawyers representing Carey Pensions about his decision to invest in Store First, Adams said: “I read and signed the application form to transfer but it did not have risk warnings. The way Commercial Land and Property Brokers put it to me was it was a good thing to do. The gentleman said it… would do better than my existing pension.”

When Carey Pensions chief executive officer Christine Hallett was questioned by Adams’ legal team, it emerged that, in 2012, 30 per cent of the firm’s £1.9m revenue was due to business from CLP Brokers.

Hallett also acknowledged she knew Store First was a product of CLP Brokers and the firm made commission on it.



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. 30% of their business came from just one, unregulated, overseas “introducer”. And this wasn’t viewed as a potential issue by management at the SIPP firm? Astonishing.

    How much of their business came from other unregulated introducers?

    The law has yet to run its course, but I know where my feelings lie.

  2. Complete sympathy for the prosecutor BUT it would seem that a non-authorised firm contacted him (I suspect cold called???), offered an 8% kick back (unauthorised payment), invested on the ADVISED recommendation of a Spanish based firm into something seemingly inappropriate ….

    Surely these are the real issues???

    I wonder how much commission Commercial Land earned in this post ‘Retail Distribution Review’ environment and I also wonder who paid the £4,000 (the article implies Carey Pensions).

    If there’s a direct link between Carey and Commercial Land then that sheds a different light on matters but still, the above points remain?

    • The real issues are:
      • The gullible consumer who responds to an unsolicited text/email /call from someone they’ve never heard of and decides to transfer all of their pension wealth into an investment they don’t understand
      • The crooked telesales individual who is seeking to rip off as many people as they can
      • The greedy IFA who puts their own wealth before that of their clients’ (not relevent in this particular case, but very relevant in many others)
      • The manufacturer of the “investment” who sets up an amazing new uncorrelated, low risk, high return utopian investment that they get to dip their sticky fingers into
      • The SIPP companies who willingly accept business at scale without asking too many questions
      • The FCA/FSCS/FOS who don’t seem to know exactly what the responsibilities of a SIPP provider are

  3. Is this not a criminal act by Carey Pension getting involved with an Unregulated Introducers to scam people as thats what it is

  4. I am coming across numerous cases were Carey Pension have provided the conduit for unscrupulous introducers to be able to transact completely unsuitable unregulated offshore investments. Without Carey’s involvement in setting up these SIPPs, these scams would would be dead in the water

    • Spot on! This isn’t a COBS case – well, it is, but that misses the root cause of the problem.

      It’s a SYSC case; Careys appear to have acted as a professional enabler and to have been wilfully blind to the risk of their firm being used to facilitate financial crime (SYSC 6 and FC, for the rulebook nerds out there).

  5. Since when after the FSMA 2000 was it legal for an unregulated introducer to’recommend’, ‘advise’ and ultimately ‘arrange’ a specific investment – introduction means finding potential clients to be properly advised by a regulated authorised professional – anything more than an introduction crosses the boundary from introduction to arranger which of course is regulated. It beggars belief it needs the High Court to establish this. The Thermatic Review in 2009 made the responsibility of the Sipp providers clear. 30% reinforces my view…. the lure of easy money has a very strong appeal.

    You cannot defend the indefensible

    • I think the more salient question might be “since when did FSMA 2000 apply to businesses resident in Spain?”. It’s not clear from the reportage where geographically the claimant was when he dealt with the “introducer”. If I had to defend the indefensible, that’s where I’d start.

  6. Carey Pension do not have a case to answer, they cannot dangle a carrot at anyone to basically try and bribe them to transfer their pension into unregulated investment, made possible by an unregulated introducer and stand back and say ” Nothing to do with us as we only do the admin “. The Financial Conduct Authority and the judge need to make an example of them, including jailing the directors and this surely will end it all once and for all.

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