A collapsed adviser firm sanctioned by the FSA for “reckless” misselling of unregulated collective investment schemes has triggered a total compensation payout so far of £734,000 with half of claims still to be decided upon.
The regulator sought to ban Bath-based IFA Pave Financial Management in November 2011 over unsuitable Ucis sales, ban its directors Timothy Pattison and Stephen Hocking and fine Pattison £90,000.
The case was referred to the Upper Tribunal but following the death of Pattison, Hocking decided to withdraw the reference. The FSA has now banned Hocking from any regulated activity. Pave has also had its regulatory permissions cancelled.
Since declaring Pave in default last May, the Financial Services Compensation Scheme has received 61 claims against the firm. Of these, 29 have been paid compensation totalling £734,000. The FSCS says it is unable to provide an estimate of the total value of claims.
Pave advised at least 65 of its 200 retail clients to invest a total of £9.7m in Ucis. At least £1.2m was invested in Ucis that have since been suspended or liquidated.
The FSA’s final notice against Hocking says he acted “recklessly” in his recommendations to invest in Ucis.
In one case an 88-year-old widow was advised to surrender six investment bonds and reinvest £680,200 of the proceeds into two Ucis funds.
Page Russell director Tim Page says: “Your heart just sinks when you hear of cases like this as it ends up with the rest of us picking up the bill.”