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Investors pursue advice firm over £30m Ucis investments

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Eighteen investors are looking to pursue an advice firm through the Financial Ombudsman Service and other legal avenues after being advised to invest a total of £30m in film, property and carbon dating Ucis funds. 

Claims management firm Rebus Investment Solutions is representing the investors and says it expects the unsuitable advice claims against advice firm Omni Executive Group to rise to up to £40m over the next couple of weeks as more investors come to the firm with claims.

Rebus was originally pursuing Omni for £1m in relation to fees paid for investing in film schemes including one claim which has already been upheld by the FOS.

The FOS judgment highlights a lack of clarity over the fact that £6,500 of the £10,000 fee went to Omni, with the rest going to the Eclipse film scheme. It ordered Omni to pay back the £6,500 annual difference along with an additional 8 per cent per annum.

Omni sent a letter to the FOS earlier this month saying it was insolvent and could not pay the claim. According to the FCA register, the firm has not been authorised since 31 July. 

Rebus is disputing Omni’s insolvency claims and says it will look to take action against the directors of the firm personally if necessary.  

Rebus head of client relations Martin Taylor says: “We are currently pursuing Omnis over the suitability of advice given to invest in these Ucis funds and have had a number of clients come to us with claims. We expect this number to rise even further in the coming weeks.”

Omni was unavailable for comment.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Interesting to look on the FCA Register and see the 3 individuals at this firm all appear to have started their careers at similar times with the same ‘upmarket’ company.

  2. Maybe like Richard Rhys they are going to go and work for Rebus?

    His profile on their webpage is quite funny when you look into his own background on the FSA register.

    On 27 July 2012 the FSA prohibited Mr Rhys from performing any function in relation to any regulated activity carried on by any authorised person, exempt person, or exempt professional firm on the grounds that he is not a fit and proper person in that he lacks competence and capability. Mr Rhys was a director of MNFA Limited, on behalf of which he marketed and promoted an unregulated collective investment scheme (“UCIS”), without conducting the proper due diligence expected of IFAs. This led him to conclude, wrongly, that the scheme was not a UCIS, which in turn resulted in a failure to comply with the statutory and regulatory standards applicable to the promotion of a UCIS. Mr Rhys incompetently made misleading statements to investors and failed to take any steps to ensure the suitability of advice to customers.

  3. Having reviewed the available media, this looks awful. Yet again, a small number of professional advisers looking to make life even tougher for the rest of us.
    I for one wold like o see he detail of the FOS decision, just to understand how bad his really is.

  4. Lets all say hello to Dan Beiny and Gary James. Clearly you chaps are not enjoying the limelight!

  5. YAWN. It is obvious that this firm Rebus must be doing something right!
    All of the people who sold these schemes should be worried, as I bet this is not the end of these revelations.

  6. Whilst the press/media coverage will potentially focus on the advisers, it would be useful if the broader coverage perhaps focussed much more on the niche and unregulated nature of the investment, the ‘protection’ regulation provides, how regulation is being tightened in respect of UCIS.

    Finally, it would also be useful for a light to be shone on the way non-regulated individuals can currently sell such investments and earn commission without any compliance standing in their way….!

  7. I just hope that because the firm has gone insolvent that the directors don’t get away scot free. Is there some way the FSCS can pursue them personally for redress, so that the rest of us won’t have to pull their irons out of the fire?

    From the posts it seems that these people were cowboys from way back – so may I ask where was regulation? FSA asleep on the job yet again and the FCA (although substantially the same people) have the great excuse – “It wasn’t us Guv it was those numpties at the FSA”
    Yep a new era in regulation.

    Thanks a bundle Mr Wheatley. When you lot mess up no doubt we’ll have another change – the FOA the Financial Outlook Authority, so that all previous culpability can be conveniently shrugged off.

  8. @Paul – could not agree enough. Failures of this kind are limited to one sector of the adviser community, and they should stand accountable. That said, from what I can see in the media around the numbers of investors exposed to this, it looks like a large number of advisers are involved from all sectors.

    @Harry – unfortunately, it probably will fall on the FSCS.

    For my money, after the recent speight of “supposed” advisers who have bankrupted themselves to avoid these liabilities, this looks like a trend that may persist.
    Maybe this is the point where the FCA makes directors/partners personally liable for failures of this kind?
    Either way, it would be good to hear something from Mr Wheatley and his team on exactly how they are protecting consumers?

  9. Spikey, so all directors should be responsible for the company failing? On the one hand we want a long stop and on the other we don’t!!!!!

  10. I think one should look closer at the numbers: 18 individuals investing £30m.

    The first obvious point is that these were the so-called high net worth individuals being sold this stuff, not widows and orphans.

    The second more reassuring point is that the total FSCS bill would be no more than 18 x £50k = £900k – not £30m.

    Twelve years ago this summer, I had a few run-ins with Gary James, trying to stop what I thought was his sloppy advice. But I would have said Dan Beiny was a slightly better quality sort of fellow.

  11. @Anonymous – where directors of ANY business are negligent in their advice yes, and especially so around asset classes like this, which in some cases have investment terms of up to 20 years.

    @Man in Black – where firms are insolvent, then the limits on FSCS are apparent. If what the article at the weekend stated is accurate (let’s see this FOS decision regarding the fees) then this is a failure of the directors and means they can also be personally liable.
    This one looks set to run…….

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