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FCA raises alarm over £4m Sipp transfer scheme

The FCA has raised “serious concerns” about savers transferring their pensions from workplace schemes to invest in AIM-listed firm Emmit plc.

The regulator says it has been made aware inexperienced investors are being encouraged to move their company pensions to Sipps in order to invest in the company.

It says up to 100 people’s pension savings, worth up to £4m, may be at risk as a result.

According to the FCA, investors are being offered cash incentives by a third party – up to 30 per cent of the transfer value of their pension – when they purchase Emmit shares. It says pension investments have “constituted a significant proportion of the demand for these shares” but is not aware that Emmit is complicit in the activity.

The FCA is also concerned members are being sent statements claiming Emmit shares are currently trading at good value, compared to their normal price.

The London Stock Exchange suspended trading of Emmit shares on 17 October after the FCA raised concerns.

Emmit could not be reached for comment.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I think this is good news that the FCA are making public this kind of activity !!

    It looks like their (FCA) early warning system on irregular stock trades may be working ? I hope they identify the source of the 3rd party and the individual investors to ascertain any skulduggery !

  2. Bethell Codrington 31st October 2014 at 11:48 am

    Is the FCA questioning the advisers who recommended this?

    Emmit shares were trading at 6p a share in December 2013, and at 97p when suspended by the London Stock Exchange last week, having risen to over 200p earlier in the year.

    Emmit’s market capitalisation is GBP17.8 million. The FCA drew attention to Emmit’s last unaudited interim accounts, which showed that the company’s liabilities exceeded its assets as at June 30.

    Cash incentives from a third party? Looks like Pension Liberation to me, and might attract an “unauthorised payment charge at best? Looks like one for HMRC as well unless these incentives are disclosed for tax purposes!

  3. SIPP’s should be closed down. They are open for abuse and often fall outside of true regulation. Ask people involved with Rowanmoor and Henley Retirement benefit scheme, who are looking at losing any money invested.
    The FCA should hang its head in shame.

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