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FCA bans and fines two advisers £885,000 for misleading clients
by Jun Merrett on Oct 18, 2013 at 10:13
Two advisers have been banned and fined £885,000 by the Financial Conduct Authority (FCA) after misleading clients.
Mark Bentley-Leek and Mustafa Dervish, directors of Bentley Leek Financial Management have been banned from holding any position at a financial firm.
The FCA said they found the two advisers lacked integrity and misled clients.
The regulator also cancelled the permissions of Bentley-Leek Financial Management which is now in liquidation.
The FCA said between 5 March 2004 and 23 November 2010 Bentley-Leek and Dervish advised over 300 clients to invest £35 million in UK and overseas property development.
The two advisers told some of their clients that their initial investment and a 6-18% return was guaranteed despite the riskiness of the investments. Some investors were told that returns of up to 50% could be expected.
The FCA said the two also failed to adequately inform investors of the conflict of interest that occurred as they were directors and owners of some of the property development companies they were advising clients to invest in.
The regulator said that despite the advisers being aware that the property investment companies were in difficulty due to the market falling and bank lending drying up, they continued to advise clients to invest. However within 17 months the firm was in administration and entered insolvency by November 2011.
The Financial Services Compensation Scheme is currently considering whether those affected may be entitled to some compensation.
Tracey McDermott, director of enforcement and financial crime, said: ‘Many consumers committed their life savings or their pensions to these property investments as they trusted Mr Bentley-Leek and Mr Dervish’s advice. The least consumers should expect from those they turn to for investment advice is honesty and integrity. Bentley-Leek and Dervish fell far short of our expectations, they failed their customers and further tarnished the name of the financial services industry.
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