An adviser firm contesting a ban and £90,000 fine after it advised clients to invest a total of £9.7m into unregulated collective investment schemes has been declared in default by the Financial Services Compensation Scheme.
Bath-based IFA Pave Financial Management was declared in default on April 17. The FSCS has so far paid out just under £56,000 in compensation and received 48 claims against the firm.
Pave advised a total of 200 clients between November 2005 and August 2010, at least 65 of which were advised to invest up to 80 per cent of their investment portfolio in Ucis.
The FSCS has been receiving claims against Pave since January, but was only in a position to declare the firm in default earlier this month.
The FSA is seeking to ban Pave and its directors Timothy Pattison and Stephen Hocking over the Ucis sales, and is also looking to fine Pattison £90,000.
Decision notices were issued against Pave, Pattison and Hocking in November. All three parties referred the matter to the Upper Tribunal on December 1. The case has not yet been allocated a hearing date.
The FSA plans to consult on new rules regarding the sale of Ucis before the end of June.