A firm has been fined £97,600 by the Financial Services Authority (FSA) for mis-selling unregulated collective investment schemes (UCIS), some of which have since wound up resulting in potential investor losses.
Derbyshire-based Topps Rogers Financial Management, which is in liquidation, has also had its permissions cancelled.
Meanwhile, Martin Rigney, the only adviser who performed significant influence functions at the firm, has been fined £117,330 and banned from carrying out regulated activities. Rigney has referred the matter to a Tribunal.
In its final notice for the firm, the FSA detailed how Topps Rogers advised 94 customers to invest more than £12m in UCIS, either directly with providers or through a SIPP or wrap platform. It also promoted the products to the customers.
Topps Rogers failed to comply with section 238 of the Financial Services and Markets Act 2000, the FSA said, which prohibits a firm from recommending UCIS unless it has an appropriate exemption.
An exemption applies when the client is a certified high net worth individual, a certified sophisticated investor or self-certified sophisticated investor.
According to the FSA's notice, material held on customer files did not show the firm had established and relied on an appropriate exemption before promoting the products.
Some of the clients did not even know they had invested in UCIS, and were unaware of the associated risks.
The FSA added a number of UCIS recommended by Topps Rogers have since been suspended or wound up, resulting in potential financial losses for customers.
"The situation was aggravated by the fact that customers were advised by Topps Rogers to invest large proportions of their investment portfolios in UCIS," it said.
Topps Rogers voluntarily varied its Part IV permission to stop arranging new business connected with UCIS in May 2009.
In January 2011, it then voluntarily varied its permission so that it could no longer carry out any regulated activities and on 27 September the business was put into liquidation following a hearing at Stockport County Court.
Rigney and his wife were then declared bankrupt on 15 November.
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October