FCA wins over £10m restitution for induced Sipp transfer victims

The High Court has ordered five parties to pay over £10m in restitution to savers who were induced to transfer into self-invested personal pensions, following a case brought by the Financial Conduct Authority (FCA).

The Court found that Avacade Limited and Alexandra Associates (UK) Limited had acted unlawfully as they arranged and advised on investments, made unapproved financial promotions through websites, promoted material to consumers via telephone calls and made false or misleading statements.

Avacade has been ordered to pay £10m, Alexandra Associates will pay £715,000, Craig Lummis and Lee Lummis will pay out £2.5m each, and Raymond Fox must pay £1.7m.

The individuals fined were judged to have been “knowingly concerned” in the breaches, according to the FCA.

These interim restitution orders were made against the five defendants subject to the proviso that, pending any second trial, FCA may not recover any sum greater than £10.715m.

Additionally, Alexandra, the Lummises and Mr Fox were banned from engaging in regulated activities in the UK without authorisation, making financial promotions and making false or misleading statements about regulated investments.

FCA executive director of enforcement and market oversight, Mark Steward, said: "The FCA will make wrongdoers financially accountable to consumers whom, as the Court recognises in this decision, '…include elderly and vulnerable citizens who have paid their due share of income tax, made sacrifices, and taken prudential decisions for their future retirement over the course of an honest working life."

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