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FSA bans partner of Sipp firm embroiled in fraud claims

by William Robins on Nov 28, 2012 at 11:57

FSA bans partner of Sipp firm embroiled in fraud claims

The Financial Services Authority (FSA) has publicly censured and banned Michele King, a partner at Sipp firm HD Administrators.

The regulator said King failed to discharge her responsibilities as an approved person through her lack of understanding the nature of HD Administrators' business and its regulatory responsibilities. 

It said she did not keep herself involved in, or informed about, the management decisions at the firm.

King became a partner at Sipp operator HD Administrators in August 2008. She had previously been employed as an accounts administrator and, before becoming a partner at HD Administrators, had performed some minor administrative tasks at the firm.

In March this year the FSA took action to stop HD Administrators from operating, and prevented the firm from paying out any funds, on the grounds directors King and Kathryn Clark did not appear to be fit and proper.

The regulator’s move followed the arrest of Clark on suspicion of fraud by false representation and money laundering in relation to an unauthorised investment firm called Arck where she was one of two managing members.

The other managing member, Richard Clay was also arrested.

Today the FSA said its case against King was part of a wider investigation into the events at HD Administrators which led to its winding up in June 2012

HD Administrators operated the HD Sipp scheme which comprised approximately 420 members. HD Administrators was wound up on 14 June 2012. 

HD Administrators is now in the hands of an official receiver in Manchester.

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5 comments so far. Why not have your say?

Ian Smith CFP

Nov 28, 2012 at 12:22

When they applied for FSA Permission to be a SIPP operator did the FSA not notice one of the partners was an administrator with no financial services exams or experience.

Even if they gave an adequate answer surely the company should have been flagged for checking.

If they had googled the other partner and seen how she described herself as being involved in hundreds of overseas property investment companies that might have sounded the odd alarm bell too

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Hickky

Nov 28, 2012 at 12:37

So this is how to do it;

1 Find an potential for investment that ticks boxes for energy, green, guaranteed return, sustainable and helping the third world.

2 Set up a bogus company selling this investment with minimal activity regarding the actual investing assets, structure as a UCIS to avoid too much scruitiny.

3 Pay IFAs a big commission and even partnerships for flogging the bogus investment.

4 In order to grab mug punters pension funds set up a SIPP operation yourself so not too much due dilligence from outside.

5 Employ mushrooms (kept in the dark and fed s**t) to run the admin.

6 Pay the first couple of years interest to investors from new receipts to stop complaints.

7 Hold back some money to pay lawyers, pay yourself huge sums for being so clever

8 Let the firm go bust and walk away from compensation issues.

9 Retire to hot country, preferable one with no extradition agreement. USA will do!

10 Read articles in NMA about reactions to this fraud by FSA and choke with laughter whilst spilling your Krug.

Mushrooms do not need fineing or prosecuting, its the perps that need to be jailed for a long time. 25 years should do!

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Julian Stevens

Nov 28, 2012 at 12:40

Given that the present four tiered system of regulatory levies (with extra FSCS ones from time to time as well because the FSA seems to consider that every other provider failure is down to IFA's) is causing many many IFA's serious financial hardship, may we be let off these as well?

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Man of Kent

Nov 28, 2012 at 14:37

@ Hickky

You seem to have a worryingly comprehensive knowledge of how to do this. If only Bernie Madoff had consulted you...

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Arthur Schopenhauer

Nov 28, 2012 at 16:36

@ Hickky

Is this the mythical New Model for advisers??

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