The Financial Services Compensation Scheme has paid out more than £3m in compensation claims against a Norwich advice firm currently in court over alleged fraud offences.
Taylor and Taylor Associates has been the subject of 119 successful claims on the lifeboat fund to date, which has awarded a total of £3.4m in compensation.
The figures obtained from the FSCS by Money Marketing represents an average of just over £28,500 a claim. When an advice firm enters administration, the lifeboat fund can pay out a maximum of £50,000 to anyone missold investments.
Taylor and Taylor was declared in default in December 2015 and is the subject of an ongoing fraud case at Norwich Crown Court.
Advisers Alan and Russell Taylor were charged with a combined 14 fraud related offences in April last year surrounding the handling of investments between Taylor and Taylor Associates and another of their businesses, Vantage Investment Group, between January 2008 and July 2015.
The charges include conspiracy to defraud and fraud by abuse of position, Norfolk Constabulary said in a statement, indicating the alleged fraud is likely to run into the millions of pounds.
The FCA ordered Vantage Investment Group to cease any regulated activity in March last year. It was also prohibited from transferring client money without the regulator’s consent and told to secure all of its records.
The FCA notice says that Vantage did not have the permissions required to manage an alternative investment fund.
The notice adds: “The Authority has received a number of consumer complaints concerning, among other matters: a lack of client documentation; an undisclosed conflict of interest with T&TA (a connected entity operated by the directors), a number of whose customers say they were recommended to invest in the fund; and misclassification of customers as professional or high net worth.”
In a statement on its closure, Taylor and Taylor Associates said that regulatory costs were partly to blame for them going out of business.
An original timetable to submit case summaries by 9 September last year ahead of a 23 September case management hearing was postponed.
The original trial was due to start in April, with an estimate that the case would run for six to eight weeks, but this is now likely to start months later.
A further case management hearing was scheduled for this Monday (9 January) but was postponed due to the judge’s availability.
what a sorry mess.
Do we know what they were doing….. and would anyone investigate whether the FCA was aware of nefarious activities before the plug was pulled – ie how quickly was action taken?
Crikey, The FSCS normally do not know what they are doing so it must be something very simple that the victims are receiving such huge sums of money. However we must also remember that as a result of incompetence in the FCA and FSCS ( for an on behalf of their masters)the Government) the result is FSCS fees increase are passed on to the Financial Advisers and their owners – who pass these on to the victims and other clients – and so the CON servative party Ponzi scheme continues – unabated uncontrolled – and profitable for those in the Pyramid Selling Scam which is Banks and Insurance companies and many National Brokerages and Financial Advisers – who charge % fees /commissions – like Equitable Life !
Well, the article states that these activities were going on from 2008 to 2015 before any action was taken. How can it have taken so long to do anything? Of what practical value is the FCA’s GABRIEL system if it misses stuff like this for 7 years? Absolutely nothing it would seem (but then we know that already). Just another regulatory imposition that serves no useful purpose whatsoever.
To answer your question, January 2008 to July 2015 = 7½ years of these activities before any (effective) action was taken. Doesn’t say much for the FCA’s GABRIEL system, does it (beyond what we already know)?
If assets are subsequently ceased under any Proceeds of Crime action, where will the monies end up?
Exactly what I was thinking Simon. The FSCS is perhaps too quick to pay compensation when it may not be a matter of poor advice but rather criminal behaviours; which should not be paid for by broker charges and levies. The police refuse to police the Insurance industry already because of poor practices and it seems the FSCS are taking it upon themselves to cover this responsibility which clearly is not their remit. Proceeds of crime should be used for compensation but as there is no actual justice or fairness in generating FSCS levies why would we expect any different from them?
It is going to be a challenge explaining to my clients that their fees will increase to cover the costs of bailing out the clients of this company’s fraud which was missed for some 7 years by our regulator.