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FSCS pays out £320k on Ucis advice firm

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The Financial Services Compensation Scheme has paid out over £320,000 to clients recommended unregulated investments almost two years after their advice firm was declared in default.

To date, the FSCS has paid out £320,036.90 on 11 claims against discretionary and advice firm Quintillion Asset Management. It is currently reviewing a further four claims against the company.

Senior management at the Carlisle-based firm set up an unregulated collective investment scheme in 2009, called the Kratos fund, to invest in intellectual property rights. It claimed to target annual returns of 35 per cent.

Quintillion’s permissions were cancelled by the FSA in July 2012 for unpaid regulatory fees and went into liquidation a month later.

The regulator later found that £2m of clients’ funds had been transferred into inappropriate investments, and that director Simon Silva-Peake had allowed a further £659,270 of client money to be misappropriated.

Money Marketing first flagged investor concerns about Quintillion in March 2013.

The FCA banned Silva-Peake from working in financial services last month. In August 2014 he was also disqualified by The Insolvency Service from acting as a director for 11 years.

Quintillion managing director Anton Taylor was also banned for 11 years while his father, also a director at Quintillion and group finance director at Kratos, was banned for six years.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. …and they’ve paid back the commission/fees, or had assets sequestrated? Nope. We pay again as flippin’ usual.

  2. “It claimed to target annual returns of 35 per cent.”

    Oh for heavens sake………….

  3. John Hutton-Attenborough 12th January 2016 at 5:17 pm

    Isn’t it time the FCA undertook a past business review on every regulated firm which has advised clients to invest in UCIS and sort this issue out once and for all?

  4. As I have said before: You invest in a company called Quintillion (1 followed by 30 zeros) in a fund called Kratos (The imaginary god of war-ghost of Sparta) targeting returns of 35%. Then you want your money back! Why are my clients who invest in boring stuff bailing these people out?

  5. The clue should be in the word ‘unregulated’. If you invest in an unregulated investment then the regulated community should not be expected to bail you out. Even if the advice is from a regulated firm. The FSCS needs to change the rules – then they can have one of their spectacularly wasteful TV campaigns to tell everyone that we are not prepared to underwrite their greed and stupidity and for once I will support the expenditure.

  6. I’ll bet two things:-

    1. Quintillion had no PII cover for selling unregulated investments (does anyone know of a PII insurer that does offer such cover?) and

    2. The FSA failed to identify such practices (a fundamental regulatory breach) and put a stop to them.

  7. “The regulator later found that £2m of clients’ funds had been transferred into inappropriate investments, and that director Simon Silva-Peake had allowed a further £659,270 of client money to be misappropriated.”
    Inappropriate investments then misappropriated clients money, surely that’s fraud ! Why are these people still walking the streets?

  8. Just an idea but a simple enforceable requirement from our great and good regulator(s) could I believe radically improve the system. Any ‘regulated firm’ that directly (or indirectly, such as by third party introduction) recommends a ‘non regulated investment’ must provide a bold print warning and signed declaration from the victim – sorry client, along the lines of;

    Investments can fall as well as rise and you may not receive back all the money you have invested. In the worst case you could lose the entire value of your invested sum.

    Furthermore, this investment is not regulated by the FCA and is therefore not afforded the normal protection of the FCA nor the FSCS, particularly in the event of a business failure, whether that be the investment recommended itself or the advisory firm providing the recommendation of the investment.

    By signing this declaration you are confirming that you understand the risks you are taking by entering into an investment that is not Regulated by the FCA and there will be no financial protection from the FSCS should any of the parties to the investment or recommendation fail.

    You enter into this investment at your own risk and if in any doubt you should seek advice from another and unconnected regulated adviser.

    ………………..
    Mr I M Culpable

    It would be a material breach of FCA rules if a Regulated firm did not obtain the necessary signed declaration whilst recommending unregulated products and should then be considered under criminal law in the event of an investment failure if the advisory firm had not provided the necessary and compulsory declaration to the investor.

    Clear transparent and easy to understand – so I’m guessing wouldn’t be considered.

  9. From the customer point of of view, what is the benefit of an UCIS?.

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