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FCA shuts down advice firm after director failed to invest client money

The FCA has removed the permissions of a Cheshire-based investment advice firm after its sole director paid client money designed for investment into his own bank account.

Geoffrey Fincher, the sole director of SK8, accepted money from customers for investment despite neither him nor the firm having permission to hold or control client money.

In a supervisory notice published yesterday, the FCA says he failed to invest these sums, as agreed or at all, and provided false information to clients. It says he acted with a lack of honesty and integrity.

The notice says one customer made out a cheque for £35,000 to Fincher in January 2002 for him to invest in the best products on the market.

In a later meeting, Fincher gave the client a handwritten note setting out the details of the investments made on the customer’s behalf.

The FCA says two of the four firms listed in the note say they have no record of any such investments.

Fincher last month removed himself from the FCA register. The FCA says SK8 no longer has any approved persons in the role of director and is therefore failing to satisfy its threshold conditions.

It has removed the firm’s permission to advise on and arrange deals in investments.

Philip J Milton & Company managing director Philip Milton says: “I welcome this action. But if clients are happy to rely on a handwritten note, I will be peeved if advisers have to pay for any losses which arise from this case.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Derek Bradley ceo Panacea Adviser 11th December 2013 at 9:29 am

    How very professional.

    This is what regulation is there to deal with, but why, if this was in 2002, did it take ’till now to discover?

    This is like a sick note from your Mum to the teacher. You could not make it up.

    I would also ask if the investor is one that needs protecting from themselves?

  2. Is the date in the article a typo or are you saying that it took FSA eleven YEARS to sort this out?

    When did FSA / FCA first become aware of the problem?

    Presumably, SK8 would have had some monitoring in that 11 year period so why was this not picked up earlier? Perhaps the regulator needs to consider a root-and-branch SYSC review?

  3. This cannot be the only case and you can be sure there are many others doing the same thing but yet to be caught. The only way to catch these people is dedicated intelligence gathering and resources. But that’s difficult and complex work. It’s easer to create more and more rules and requirements and claim you are addressing issues. Two problems with this. Firstly, the crooks will ignore them anyway. Secondly, it makes it harder and more costly (for which client pay) for the good people trying to do a god job.

    The FCA like to talk about outcomes but the elephant(s) in the room are the current rules and approach. The rules are, in many respects, a sea of shifting sand subject to the next bit of innovative interpretation. And the FCA assumes everyone is doing it wrong which creates a defensive culture within firms which stifles progress.

    Regulation appears to be more about looing good than being good. It’s not working. And it’s not about clients.

  4. Please tell me this is going onwards to the police.

  5. I tell my clients NOT to trust me as it only takes one knock on the head to change a personality and honesty can go out the window with that.
    It is frightening how trusting clients are and hence why I suspect Grey Area is correct. This could be the tip of the iceburg.

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