View more on these topics

FSA fines and bans directors for mismanaging investment scheme

The FSA has banned and fined the directors of a Yorkshire-based adviser firm for running an investment scheme which put 53 customers at risk of losing nearly £10m.

In a statement released today, the FSA says Neil Marlow, and his son Timothy, of the Bridford Group from Skipton in North Yorkshire, were approached by ‘businessmen’ with an investment scheme that they chose to promote to clients and other IFAs. The FSA says the Marlows did not properly consider whether the scheme could work or investigate whom they were dealing with.

The scheme promised a guaranteed return of at least 6 per cent, but to deliever that the FSA says the Marlows made a series of unauthorised transfers of investors’ funds in an attempt to generate the returns on the investment that customers had been promised.

The regulator has fined Neil Marlow £38,383 and fined Timothy Marlow £31,838. Both have been banned from holding any significant management influence functions.

It has also fined City Gate, a Glasgow-based group, £42,000 for approving promotions for the scheme to its ARs. The FSA says the group’s systems and controls for reviewing financial promotions were “simplistic, informal and applied inconsistently”. It told the FSA that it trusted Neil Marlow and saw no reason to question the scheme.

As a result of promoting the scheme 53 customers, including one of City Gate’s customers, invested £9,452,000 which the FSA says was put at a serious risk of loss.

FSA director of enforcement Margaret Cole says: “The Marlows did not properly consider who they were dealing with and the feasibility of the investment scheme presented to them. The financial promotions they generated and submitted to City Gate were seriously deficient, which had the effect of misleading customers about the risks involved in investing in the scheme.”

Cole also criticised City Gate’s failings: “Firms which have AR networks have important responsibilities in monitoring them, including approving any financial promotions they issue. If they do not carry out these responsibilities properly they are failing the regulatory system and the IFAs and consumers who rely on them.”


Recommended

Lloyds pledges role for smaller brokers

Lloyds Banking Group head of intermediaries Peter Curran says the bank will not favour bigger distributors and pledges that brokers will be key to its growth plans.

Omo breakthrough

This month has seen one of the biggest developments in the promotion of the open market option for annuities that I can remember. I am not talking about the launch of the industry trade body aiming to promote a greater range of retirement options but the sight of a clever and engaging TV commercial promoting retirees’ right to shop around into millions of homes around the UK.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Julian Stevens 21st July 2009 at 1:49 pm

    FSA fines and bans directors for mismanaging investment scheme
    It would be interesting to know how much time elapsed between when the scheme first came to the attention of the FSA and when the FSA initiated action to investigate and ultimately put a stop to it. If the FSA acted quickly and decisively, then it is naturally to be praised. The thing is, though, the department over which Margaret Cole presides seems to have something of a track record of not doing anything at all until the misdemeanour in question has already been going on for about three years, so it would be interesting to know what the FSA’s action timescale was for this particular case.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com