Law firm files ‘biggest ever’ lawsuit against Liberty Sipp

Law firm Anthony Philip James & Co (APJ) has filed more than 30 cases against self-invested personal pension (Sipp) provider Liberty Sipp for the mis-selling of Sipps between 2011 and 2013.

According to the firm, it is the largest number of claims against Liberty Sipp and APJ will be looking to consolidate the cases, which it said had affected over 700 investors.

Liberty Sipp invested claimant’s money into a number of schemes, including Ethical Forestry and Global, through an “unregulated introducer” that is now under investigation by the Serious Fraud Office.

APJ solicitor said: “Liberty Sipp has frequently argued that only a small proportion of legacy investors have lost money through unregulated Sipp investments, however from the cases we have on our books at the moment, we estimate that as many as 10 per cent of Liberty’s investors have been affected and we believe there could be many more.

“Liberty Sipp breached their obligation to act honestly, fairly and professionally in accordance with the best interest of their customers as set out by the Financial Conduct Authority (FCA) Conduct of Business rules.”

Liberty Sipp said it stopped investors from investing in non-standard assets in 2013, after guidance from the FCA on taking due diligence on high risk investments.

However, Taylor claims this action should have been taken in 2011.

“If Liberty were truly mindful of their responsibilities to treat their customers fairly and act in their best interests under COB 2.1.1R of the FCA Handbook the non-standard assets should not have been allowed as an investment within a SIPP, as they are contrary to the purpose of a Sipp which is to provide a pension income”, he added.

Last month, the Financial Services Compensation Scheme (FSCS) reiterated its decision to put three Sipp operators in default, after it received approximately 150 claims for compensation against Brooklands Trustees Limited, Stadia Trustees Limited and Montpelier Pension Administration Services Limited.

The FSCS said it now expects compensation costs to total £34m in order to plug the deficit created by growing Sipp-related claims against life and pensions advisers.

Aegon pensions director, Steven Cameron, said: “In recent weeks, we’ve seen some negative commentary on Sipps. However, digging deeper, many of these concerns are about the increasingly rare minority of Sipps which allow access to unregulated investments. Investing in unregulated products or funds is high risk and only worth considering for sophisticated investors who have sought expert advice.”

The Work and Pensions Select Committee recently wrote to the FCA asking it about its requirements for Sipp providers to carry out due diligence on non-standard or unregulated funds and its powers for punishing Sipp providers who fail to fulfil FCA requirements here.

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