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FCA bans and fines adviser £350k for Ucis failings

The FCA has banned and fined a financial adviser £350,000 for promoting unregulated collective investment schemes to retail investors.

Craig Cameron, a director of London-based advice firm Burlington Associates, helped to set up three high risk Ucis in 2005 investing in new property developments in Croatia, Bulgaria and Montenegro.

During 2005 the Ucis were promoted to thousands of retail investors, without adequate checks being made to ensure the investors were eligible for these promotions.

Over 800 consumers invested around £30m in the three UCIS, which subsequently failed.

Cameron wanted to involve Burlington, which was an appointed representative of a network at the time, in promoting and selling investments in the Ucis.

However, Burlington’s network prohibited these activities.

Cameron therefore arranged for a separate advisory firm, Leslie & Nuding (trading as Burlington Funds and now known as Leslie & Swallow) to take responsibility for checking investors’ eligibility and sending out promotional materials.

In reality, a firm under Cameron’s control carried out the vast majority of these activities.

Cameron made Burlington and staff under his direction instrumental in every stage of promoting and arranging investments in the Ucis. The FCA says this was a deliberate breach of the agreement between Burlington and its principal firm.

The regulator says Cameron knew that his activities created a risk of the Ucis being sold to investors for whom the products were unsuitable.

It says he “recklessly” devised a structure that was likely to provide false assurance that Burlington’s involvement was authorised.

FCA director of enforcement and financial crime Tracey McDermott says: “Cameron deliberately flouted regulatory requirements, which were designed to safeguard retail investors, in favour of selling high risk Ucis for potentially lucrative gains.

“The Ucis have failed and the investors, many of whom should never have been exposed to these high risk investments in the first place, have paid a heavy price for his actions.”

In August 2013, the FCA fined and banned two other advisers for failing to adequately oversee the roles of their firms in the Ucis sales.

John Leslie and Jeffrey Bennett held controlled functions at Leslie & Nuding and Burlington. They were banned and fined £28,000 each.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Frigging unbelievable!!

    800 people screwed over and another £30m of FSCS costs to IFAs

  2. I remember these at the time and having had grave suspicions about the concepts and so on, despite the apparent suave and slick presentations. The risks were clear – whether or not the investments were authorised. A fool and his money….

    Why should the ‘rest’ of the advisory community, in the end, pick up the tab and the reputation for silly people ‘investing’ in stupid things/or stupid ways even if occasionally the concept behind the idea might have a seed which could work (not this one though)?

    What about the BTL market – thank goodness that is not something which will fall on ‘investment advisers’ when the bubble bursts as such property investing is not ‘regulated’ bizarrely – though I can see the FOS judgements now for cases where the levels of mortgage debt and on main residences to fund them too are adjudged excessive and not fitting for the clients’ risk profiling at the time…

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