A FINANCIAL adviser has been fined £117,300 and banned from carrying out regulated activity after an investigation by the Financial Services Authority (FSA).
Martin Rigney was a partner at Topps Rogers, based in Sheffield, when he promoted and advised customers to invest in unregulated collective investment schemes (UCIS) without assessing their eligibility for such schemes or explaining their suitability.
Based on his advice, many customers invested substantial amounts in these complex, high-risk products, even though they were unlikely to be suitable. In one case, one of Rigney’s customers put 89 per cent of his investment portfolio in UCIS, while Rigney also advised a retired couple to put 80 per cent of their investment portfolio in UCIS to provide for their retirement.
When the FSA began investigating Topps Rogers, Rigney agreed to stop promoting and advising on UCIS in 2009, but the following year he arranged a UCIS sale when he attempted to transfer two existing customers’ holdings in a UCIS to a new customer.
Rigney also carried out discretionary portfolio management without his customers’ knowledge, switching customers’ investments into UCIS without notifying them or obtaining their signatures.
Two of his customers said they were away on holiday on the date that the dealing instruction forms were submitted and therefore could not have signed the forms.
Topps Rogers, which was fined £97,600 in February, is now in liquidation and Rigney is bankrupt. Tracey McDermott, director of enforcement and financial crime at the FSA, said he had shown a “serious lack of competence” and had “acted without integrity”.
She said: “Under Rigney’s watch, Topps Rogers advised 94 customers to invest over £12m in UCIS.
“We have made our views on UCIS very clear: these high risk, complex products should not be promoted to the vast majority of retail investors in the UK. We will continue to take tough action against firms and senior management when they mis-sell these high risk products.”
The FSA has brought 19 cases against advisory firms for UCIS failings since 2011.