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.”