FCA launches High Court proceedings over 'unsuitable' DB transfer advice

The Financial Conduct Authority (FCA) has begun civil proceedings in the High Court against Estate Matters Financial (EMF) director and co-owner, Paul Steel, and his partner, Jacqueline Foster, over unsuitable defined benefit (DB) transfer advice.

The FCA is calling on the court to make a restitution order, which would require Steel to compensate those consumers who have suffered losses as a result of receiving unsuitable pension transfer advice.

It has alleged that EMF contravened various requirements under the Financial Services and Markets Act 2000 by providing “unsuitable DB pension transfer advice”, leading consumers to exit such schemes when it was not in their best interests.

The FCA has also alleged that Steel was “knowingly concerned” in those contraventions.

In addition to this, the FCA stated that Steel breached FCA requirements by undertaking a course of conduct which resulted in the removal of EMF’s assets.

This resulted in the business being unable to meet the potential liabilities for unsuitable advice, whilst allowing Steel to retain “significant profits” that were accrued as a result of that advice, and from ongoing fees.

As part of the proceedings, an interim injunction has been secured, freezing the assets of both Steel and Foster, up to the value of £7m, pending a further hearing.

The FCA explained that an injunction was obtained against Foster on the basis that she may be holding or controlling assets owned by Steel.

No trial date has yet been set.

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