Three directors of Quintillion Asset Management have been banned for making unauthorised investments from client pension funds and inappropriate investments on behalf of clients, following an investigation by the Insolvency Service.
Quintillion Asset Management, a discretionary adviser frim from Carlisle, had its permissions cancelled by the FSA in July 2012 for unpaid regulatory fees and went into liquidation a month later.
Money Marketing first revealed in March 2013 that an investor action group had been set up by Quintillion clients to find out what had happened to a fund they invested in.
Alongside their roles at Quintillion AM, senior management of the firm also set up a Ucis fund in 2009, called the Kratos fund, to invest in intellectual property rights. It targeted annual returns of 35 per cent and is thought to have amassed up to £2.5m of assets.
Former Quintillion managing director Anton Taylor also acted as group managing director of the Kratos fund. His father David was a director at Quintillion and group finance director at Kratos, while Simon Silva-Peake acted as investment director for Quintillion and fund manager for Kratos.
All three have now been disqualified from acting as directors for between six and 11 years.
David Taylor has been banned for six years, while Anton Taylor and Silva-Peake have been banned for 11 years each.
Investigators found the directors were responsible for transferring pension funds of at least £659,270 in breach of agreements with clients. A further £2m was transferred from client funds to investment schemes that were inappropriate for clients’ risk profiles.
The Insolvency Service says the failings resulted in liabilities of £2.4m.
The directors’ failure to deliver up the company’s accounting records meant that investigators were unable to account for unauthorised transfers of client funds or establish who within the company was responsible for, or had knowledge of, transfers of client monies.
Ken Beasley, of the Insolvency Service’s Public Interest Unit, says: “Investors who believed that the company was providing professional investment advice to safeguard their pensions have lost significant sums of money. The company’s actions in making high-risk investments against the wishes of clients were unacceptable and the directors bear that responsibility.
“By failing to preserve the company’s accounting records the directors also showed a fundamental disregard for their duties as directors of a limited company.
“The disqualifications demonstrate that the Insolvency Service will use its enforcement powers to remove irresponsible and culpable directors from operating with the benefit of limited liability in the business environment.”
Quintillion AM was declared in default by the Financial Services Compensation Scheme in April.