View more on these topics

FSA fines two ex-A2O directors £42,000

The FSA has fined two former directors of Alpha to Omega (UK) a total of £42,000 for widespread compliance failings leading to the risk of unsuitable investment advice.

A2O compliance director Andrew Ruff has been fined £28,000 and has been banned from performing any significant influence function, while managing director Richard Lindley has been fined £14,000.

The fines follow an FSA review of customer files of an A2O appointed representative in March 2009, after which A2O was required to appoint a skilled person to review the IFA network’s compliance systems.

The skilled person found widespread compliance failings, leading to the risk of clients receiving unsuitable investment advice.

The FSA says this was particularly problematic where clients had been recommended high risk investments such as unregulated collective investment schemes.

A2O agreed to stop its ARs recommending a number of UCIS schemes, but failed to improve its compliance systems. A2O was forced to stop all regulated activities in January 2010.

Ruff and Lindley were fined because they failed to effectively monitor and control sales made by its ARs. The fines were also due to the failure to ensure systems and controls weaknesses were addressed, and because they failed to oversee their advisers.

A2O also failed to collect relevant and accurate management information, and failed to act to correct the behaviour of its ARs.

FSA acting director of enforcement and financial crime Tracey McDermott says: “Lindley and Ruff shared the ultimate responsibility for ensuring the financial advice provided by their network of advisers was suitable for their clients. They both failed in their responsibilities and this resulted in unsuitable advice being provided to some clients.

“Those who oversee networks of ARs need to ensure that they keep a close eye on the advice being given throughout their network, especially where the advice includes high risk products such as UCIS.  If there are failings in the way customers are treated anywhere in the network, the principals will be held to account.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. It always amazes me that the FSA makes examples of those in the smaller firms highlighting ‘the risk of clients receiving unsuitable investment advise’ while failing to address the actual miss-selling within the larger firms it purports to regulate.
    It would appear that if there are a number of layers of management then all are protected, are not fined, keep their jobs and continue to be permitted to trade.
    Effectively the Regulator is saying these companies are too big for them to take on and as many at the FSA will want to return to positions at these larger firms they presumably to not want to rock those particular boats.

  2. At last a semblance of justice. Andrew Ruff was the person who denied that the advice given to my elderly clients by their AR was deficient when common sense and decency should have seen the complaint upheld and paid out by their PI insurer, instead the clients have been waiting 2 yrs via FSCS to be paid out the paltry sum of £100,000 when they actually lost £200,000 plus.

    They were advised to borrow money and invest in the Integrity GTEP maximiser in their 70’s

  3. It does seem that way – well said John sorry if I’m in a daze I’ve just taken some ICOBS medication apparantly it brings back your memory ……..euro millions ah ha it must be friday great going fishing tomorrow……..I think !!!!!

  4. Julian Stevens 15th July 2011 at 7:51 pm

    I remember Andrew Ruff when he was director or compliance at Interdependence and, I have to say, he always seemed alright to me. Reportedly, he also had a very great deal on his plate, in addition to commuting daily from Worcester to Andover.

    Apparently, though, after Interdependence was sold to Tenet, the latter found quite a few skeletons in the closet, to the extent that they strongly advised the FSA against reauthorising him.

    But what do I know? I just hear things here and there and probably not the half of it.

Leave a comment