The Financial Conduct Authority (FCA) has banned two financial advice firm directors from any regulated activity following their roles in the submission of misleading information about customers’ high net worth status.
Peter Howsen and John Butterfield, directors of Vanguard Wealth Management - which has no connection to the Vanguard Group - submitted inaccurate information to self-invested personal pension (SIPP) provider James Hay, which had no knowledge of their actions.
The FCA said both directors of the now-liquidated firm knowingly and repeatedly made these false declarations, increasing the number of Vanguard customers who purchased Elysian Fuels shares through their James Hay SIPPs. This then generated substantial fees and commissions from which they both benefitted. As a result of their actions clients lost money.
The regulator found Howsen deceived James Hay about the high net worth status of six customers after he submitted fabricated information between 26 February 2014 and 21 November 2014. He submitted 27 declarations altogether, the FCA said, in which he falsely claimed to have seen evidence of the client's net worth. He also dishonestly submitted false information relating to his own financial circumstances to the SIPP provider when submitting his own applications.
Meanwhile, between 6 March 2013 and 1 September 2014, the FCA found Butterfield submitted 48 high net worth declarations in which he also falsely claimed he had seen evidence of the customer's net worth.
FCA executive director of enforcement and market oversight Mark Steward said: "Both advisers knew, or should have known, that what they were doing lacked integrity and betrayed the high standards expected by the FCA. They have no place in the financial services industry."
Elysian Fuels was sold as a scheme investing in renewable energy projects in the UK and the US, including in 2013 the launch of a bioethanol plant in Grimsby. Investors faced heavy losses after Future Capital Partners, which sold and marketed the scheme, cut the value of the shares in the scheme from £1 each to nought.
Trading in Elysian Fuels shares, which were listed on the Channel Islands Stock Exchange, was suspended in September 2013 and the stock was delisted in March 2014. In April 2017, James Hay was told it faced a financial penalty of £1.8m as part of an ongoing investigation into Elysian Fuels by HMRC. James Hay confirmed to PA that it is still in discussions with HMRC over the charges, but said it should be resolved soon.
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