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Mini-bond firm finally ordered to cease activity by FCA

Mini-bond firm finally ordered to cease activity by FCA

The company that promoted a number of mini-bonds that lost investors £15.2 million has been ordered to ‘cease all regulated activity’ by the Financial Conduct Authority (FCA), but the regulator has yet to withdraw its authorisations.

Independent Portfolio Managers (IPM), which previously operated under a number of other names, including Smile Global Management, has also been told not to ‘dispose of, deal with or diminish the value of any of the assets of the firm without the prior consent of the FCA’.

This is just the latest revelation in a long-running story that involves a number of mini-bonds.

Back in 2014-2015, two-mini bonds launched by US firm Providence Financial ended up losing investors around £8.15 million after the firm went into administration in September 2016. This followed a statement by the US Securities and Exchange Commission (SEC), which accused the company of selling fraudulent and unregistered securities, ordering it to cease trading.

The mini-bonds had attracted 825 investors offering them yearly interest payments of 8.25% and 7.5%. It later emerged that the money raised had not been used for its intended purpose.

They were promoted to UK retail investors by FCA regulated IPM. This was not the only failed mini-bond IPM has promoted during its lifetime.

Over 900 individual investors also lost out when Secured Energy Bonds went into administration in January 2015. IPM approved promotional material and acted as a security trustee for them. As a result, investors lost over £7 million. Earlier this year, the administration was extended to January 2018.

If IPM was not involved, the bonds could not have been advertised to private investors in the UK. Although the Financial Ombudsman Service (FOS) initially told investors that this was not under its remit, an investor successfully challenged this decision earlier this year, meaning investors can now mount official complaints against IPM.

So who is IPM?

It is important to note that although IPM has been hit with restrictions, the company continues to hold its FCA authorisation. The FCA did not say when the restriction was applied this year and said it could not comment on individual companies.

IPM is led by three directors: Tony Curtis, who formerly worked at a number of financial services companies, including JO Hambro and Gartmore; Martyn Ingram, who served as a director of Pendleton May Financial Services; and Christopher Day, who was previously managing director of Dresdner Bank’s Asian investment business.

Over the years, the company has operated under several trading names including Unbiased Portfolio Management, Smile Global Management and the Investors Partnership Research.

While the FCA has asked the company to cease all regulated activities it has also noted that the ‘requirement does not prohibit the firm from dealing with or disposing of any of its assets in the ordinary and proper course of business’.

IPM could not be reached for comment.

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