A " deceitful" Yorkshire financial adviser who cost an investor £2m and his marriage is "incredibly" allowed to continue working by regulators despite being ruled against in court and avoiding further legal action after liquidating his company, an MP has revealed.
Conservative Kevin Hollinrake described the adviser, Scott Robinson, as a “clever salesman” with a “long and extremely chequered history of providing investment advice”, who moved his clients into a new firm after being sued for advising on investments which failed and were not covered by professional indemnity insurance.
Mr Hollinrake described the case of his Thirsk and Malton constituent, Andy Mohun-Smith, who lost £2m after trusting Mr Robinson and said the saga had a “devastating” impact on his life and health, with the stress involved “undoubtedly a major factor” in the break-up of his marriage.
The MP also strongly criticised the Financial Conduct Authority (FCA) regulator for allowing Mr Robinson to continue working as an an approved adviser because it was concerned that otherwise it could be “depriving an individual of their livelihood”.
Mr Hollinrake told the story of Mr Mohun-Smith and another constituent, known as Helen, during a Westminster Hall debate.
He said it was “truly astounding” that Mr Robinson was allowed to continue working given his history.
In 2014, Mr Mohun-Smith was awarded £2.2m in damages at the High Court after Mr Robinson failed to attend a hearing.
But the adviser was given a reprieve as the Court of Appeal in April 2016 ordered another High Court hearing of the case.
Mr Robinson, however, put his company TBO Investments into voluntary liquidation August 2016 before the new hearing could not take place, therefore “thwarting any attempt by my constituents to take legal action to recover their losses and leaving his own lawyers indeed out of pocket”, the MP said.
The adviser then “phoenixed”, or moved, his former clients into another firm he owned, Mount Sterling Wealth, which he resigned from four days ago in a move described by Mr Hollinrake as “perhaps coincidental, perhaps not”.
Mr Robinson had also previously faced censure from the Financial Ombudsman, which in 2011 ruled he had provided unsuitable advice and was ordered to pay compensation, the MP said.
In 2015, TBO was also issued with a compulsory strike-off order from Companies House as it had failed to submit accounts, according to Mr Hollinrake.
Mr Robinson remains approved by the FCA.
Mr Hollinrake said: “I have met with Andrew Bailey, the chief executive of the FCA and spoken to senior executives in the FCA itself, but incredibly the only justification I can get so far of this continuing designation of Mr Scott Robinson as an approved person is that they were concerned that they may be depriving an individual of their livelihood.
“This individual, with this chequered record.
“You may ask - what about the deprivation of my constituents’ livelihoods, of their income, of their investments, of their hard earned money?
“Is this not what the FCA should be principally concerned with?”
He went on: “For my constituents, Andy and Helen, this has been a most traumatic experience.
“In Andy’s words - ‘this has had a devastating effect on my life, the damage to my health has been considerable, the enormous stress my wife and I were subjected to as a result of Mr Robinson’s disastrous investment decisions was undoubtedly a major factor in the break-up of our marriage’.
“These words say more than I ever could.
“The FCA, the regulator we entrust to make consumers, investors and our businesses, make sure they are fairly treated, has many questions to answer.
“It needs to take a long, hard look at itself and prove to those it is accountable to - the Treasury and to Parliament, that it is able to carry out the role it is required to do.
“I for one am very sceptical that it is capable of doing so.”
We need regulator with teeth who is willing to bite, says MP
Treasury Minister Robert Jenrick said the constituents’ stories were “very troubling” and suggested that either the rules had “not been able to give them the protection that they deserve or that the FCA have not acted to enforce those rules in the way that we would have hoped”.
He said he would “bear thought” to Mr Hollinrake’s suggestion that financial advisers should be given ongoing approval by the FCA.
Mr Jenrick said the FCA was actively looking into “phoenixing”, and promised to raise the cases with its chief executive Mr Bailey because Mr Hollinrake and his constituents “deserve answers and action”.
Mount Sterling Wealth has not replied to a request for comment.