The FSA has banned and fined the directors of a Yorkshire-based financial group for their misleading promotions and the mismanagement of an investment scheme which put 53 customers at serious risk of losing nearly £10 million they had invested on the basis of a guaranteed return of at least 6%
Neil Marlow, and his son Timothy, of the Bridford Group were approached by ‘businessmen’ with an investment scheme and did not properly consider whether the scheme could work or investigate who they were dealing with. They also made a series of unauthorised transfers of investors’ funds in an attempt to generate the returns on the investment that customers had been promised. The result was that the assets could not be realised at the scheduled maturity date to repay the investors. The customers would have lost all their investment but for the corporate trustees’ professional indemnity insurers agreeing to repay their capital and the interest payments they had been promised
The regulator said that both individuals settled at an early stage in the proceedings and the fine of £38,383 imposed on Neil Marlow and the fine of £31,838 on Timothy Marlow reflects this. Both have been banned from holding any significant management influence functions
The FSA has also fined City Gate Money Managers Ltd of Glasgow £42,000 for approving financial promotions issued by the Appointed Representative (AR) run by the Marlows, designed to encourage investment in the scheme. The FSA found that City Gate failed to have adequate systems and controls in place to ensure that financial promotions issued by its ARs were clear, fair and not misleading.
City Gate also settled at an early stage in the proceedings. It has also agreed to a voluntary variation of permission to stop taking on any new ARs and stop conducting pension transfer business, an area over which the FSA also has concerns. It will also carry out a past business review which will look at products sold to customers other than those who invested in the scheme.
Margaret Cole, FSA director of enforcement, said:”The Marlows did not properly consider who they were dealing with and the feasibility of the investment scheme presented to them. The financial promotions they generated and submitted to City Gate were seriously deficient