A man whose pension savings went into unregulated funds says he was offered £6,000 by his financial adviser not to raise concerns with the authorities.
According to the BBC, Stephen Sefton from Milton Keynes realised that is financial adviser is not authorised to deal with pension transfers. Sefton was asked not to communicate with journalists, regulators and the national fraud reporting centre, Action Fraud, in return for the money.
Sefton had decided to transfer the £415,000 in his company pension scheme into a new pension in 2015.The financial adviser he found online recommended the money should go into an overseas pension scheme.
Sefton agreed, but a year later he became concerned. Most of his money had been invested through the overseas pension scheme into a fund called Blackmore Global. The rest had gone into an investment fund in Malta.
He struggled to get a proper valuation of what his stake in the Maltese fund was worth, so called the City regulator, the FCA.
"They told me the adviser was unregulated to give investment advice," Sefton said.
He was surprised because the company's FCA registration number was displayed at the bottom of the letters it had sent him and the company, Square Mile International Financial based in Prague (and which should not be confused with any company with a similar name), is listed on the FCA register.
But the FCA has confirmed to the BBC that the company was only authorised to deal with insurance mediation. It did not have the necessary permission to deal with pension transfers.
Sefton discovered the fund in Malta was a professional investor fund only and was not suitable for a retail investor like him.
He also found that another company involved in the administrative side of transferring his pension was run by the same men who control Blackmore Global, the unregulated fund where most of his money ended up.
After months pursuing his case, Mr Sefton got most of his money back.
Then an email from Square Mile International Financial offered him £6,000 if he signed a confidential settlement agreement.
It required him not to make further communications with anyone about his case and that included journalists, blogs, financial advisers, regulatory authorities and Action Fraud.
David Vilka, who acted as Sefton's financial adviser and is one of Square Mile International Financial's directors, denies the money was to keep him quiet and said it was a "gesture of goodwill" to close the matter "amicably" after Sefton had made what Mr Vilka describes as "defamatory" remarks.
Vilka said Square Mile International Financial's permissions and activities had been "inspected and verified in full by numerous regulators" and maintains that his firm is authorised and has not done anything wrong.
Sefton did report some of his concerns to Action Fraud, but it wrote to him saying it had not identified any leads to follow up.
He said he had still lost about £30,000 as his stake in the Maltese fund had dropped in value by the time his money was taken out.
His investment in the Blackmore Global fund was returned to him and exit fees were waived.