A note on the firm’s Financial Conduct Authority (FCA) register entry says it was asked to cease all regulated activity.
According to documents filed at Companies House, Cumulus Investment Management was dissolved on 13 June.
It also states that the firm’s director Andrew Lucas, resigned from his role in February.
Attempts by International Adviser to get a comment from Cumulus were unsuccessful.
‘Unsuitable advice’
The firm’s collapse comes after the UK’s Financial Ombudsman Authority upheld 12 complaints against Cumulus in connection to advice given on an Eastern European property fund called the Cumulus Ukrainian Property Fund.
In the most recent ruling, published earlier this year, the firm came under fire for “unsuitable advice” after recommending, in 2013, that a client invest nearly £50,000 (€58,937, $63,995) of his pension into the unregulated property fund via a Sipp.
The Bermuda-listed Ukrainian property fund, which invested in a limited number of properties in Eastern Europe, was suspended on 30 June 2015. Subsequently, Cumulus Investment Management was told by the FCA to “immediately cease all regulated activities”.
There are now concerns the Financial Services Compensation Scheme (FSCS) may pick up the bill for a number of claims although the firm has yet to be declared in default by the lifeboat fund.
FOS complaints
In many of the FOS complaints, the ombudsman found clear “conflicts of interest” over the decision to invest in the fund, as two directors of Cumulus Investment Management were also directors of the Ukrainian property fund.
Other hallmarks of the complaints included that the clients were all first introduced to the fund through an unregulated introducer.
Cumulus Investment Management also claimed it was advising on “an execution only” basis – a claim which the ombudsman roundly rejected, adding that the investment was considered too risky and sophiscated for many of the clients.
