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FCA writes to pension transfer introducer clients over legal action

Concept of green plant grow on British Pound currency note.The FCA has written to all former clients of Avacade Limited, an unregulated pension introducer, to inform them about its legal action against the firm and its directors.

In November 2017 the FCA said it would start civil proceedings against Avacade Limited, now in liquidation, and its three directors Craig Lummis, Lee Lummis and Raymond Fox.

The watchdog alleged Avacade and a related firm, Alexandra Associates, provided a pension report service to promote Sipp investments in alternative investments such as tree plantations, repossessed property bonds and a resort in Brazil.

The regulator also alleged these firms made misleading statements, providing “financial advice to clients, and made arrangements for clients to transfer their pensions into Sipps with a view to puchasing high-risk investments.”

The FCA’s letter, dated 14 November and obtained by Money Marketing, confirms legal proceedings began in September 2017 and will consist of two trials, the first to prove liability, and a second to determine the amount of losses suffered by investors.

The first trial is due to commence in January 2020 afgter a timetable was set in August this year.

The letter adds the FCA believes alternative investments which were promoted specifically include plantations in Costa Rica and infamous collapsed Cambodian scheme Sustainable Agroenergy.

The FCA encourages clients whose pension transfers were never completed to contact the regulator as soon as possible.

A number of legal firms, including financial mis-selling specialist Anthony Philip James and Co, are bringing cases against Sipp providers including Liberty Sipp on behalf of former Avacade clients relating to leads given to the Sipp providers by Avocade.

APJ financial misselling solicitor Glyn Taylor says: “We welcome the FCA action against Avacade. It confirms our argument that Avacade was providing advice to clients despite not being a regulated firm.

“This is a key part of the cases we are bringing against Liberty Sipp on behalf of our clients and the FCA action will strengthen these cases. Our cases against Liberty Sipp will continue to progress in tandem with the FCA action against Avacade.

“We are also alleging that Liberty Sipp has a separate duty of care to clients when they accepted such a large number of introductions from Avacade, and that they have breached this duty of care.

“What’s more, we allege that there was joint enterprise between Liberty Sipp and Avacade.”

Money Marketing was unable to acquire contact details for the Avacade directors.

Liberty Sipp had not responded to a request for comment at the time of writing.

The FCA declined to comment.

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  1. But the horses have already bolted…. What hope can there be of recovering the monies the victims have lost?

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