UK adviser banned and fined £300,000
The UK regulator has banned a financial adviser after his clients lost £2.2 million investing in companies he controlled.
Peter Carron, a former senior parter at St James's Place Wealth Management, has been fined £300,000 by the UK Financial Conduct Authority (FCA) and banned from performing any function related to regulated activities in financial services.
Mr Carron advised 11 clients to invest a total of £2.4 million in three companies of which he was a director and a majority shareholder without adequately disclosing the fact to them, said the FCA.
"The clients later lost approximately £2.2 million when the companies went into liquidation between May and August 2010. St James’s Place subsequently paid these 11 investors £1.9 million in compensation," said the statement.
FCA director of enforcement and financial crime Tracy McDermott said people who go to financial advisers are entitled to expect their adviser will act in the client's best interest, not their own.
"Advisers should think very carefully and make clear and full disclosure if they are intending to advise clients to invest in ventures in which they have an interest," Ms McDermott said.
"Carron misled clients about the likely performance of their investments, by guaranteeing a return or providing inappropriate financial projections of future returns," she said.
"Carron continued to reassure investors and advise them to invest, even when he knew his companies were in financial difficulties," Ms McDermott said.
"He also led clients to believe that the investments were approved or endorsed by St James’s Place, which was not the case," she said.
"What is more, Carron advised the clients to invest without assessing whether the investments were suitable for their needs, and failed to alert them to the possible risks," Ms McDermott said.
30% of Aussies trust robo-advice
Nearly a third of Australians trust robo-advice, new research from Thinque has ...
New life insurance solution for professionals
Accredited advisers will soon be able to offer a complete life insurance solutio...
AMP board in hot water
AMP chairman David Murray, along with the rest of the board, could see their sea...