Paul Reynolds, whose offences were committed while working as chief executive at Aspire Personal Finance between 2005 and 2010, was fined £290,344 and banned from performing any function in relation to regulated activities in the UK on the basis that he is not fit and proper because he lacks integrity.
The FCA found that Reynolds, who has also previously worked at advice firm Globaleye, “recklessly” recommended high risk investments to eight retail clients, when he was aware that he could not justify their suitability.
He was also found to have been involved in retrospectively creating signatures purporting to be the signatures of two clients on sophisticated investors’ certificates to suggest that UCIS products could legitimately be promoted to them.
The FCA reports that many of the clients were on low incomes and had little or no investment experience.
"Today’s fine reflects the fact that we will not hesitate to take action against firms or individuals who fail to put the best interests of their clients first"
Tribunal
Reynolds was also found guilty of retrospectively creating documents which explained the risk of the high-risk products for client files and represented that they were contemporaneous and had been sent to his clients, as well as making investments on behalf of two clients without their knowledge.
Reynolds had previously been unsuccessful in an application to the tribunal to prevent the FCA from publishing the decision notice.
George Phillippou, acting director of enforcement and market oversight at the FCA, said: “People should be able to trust advisers to recommend products which will suit their needs.
“Today’s fine reflects the fact that we will not hesitate to take action against firms or individuals who fail to put the best interests of their clients first.”
Strict compliance
Robert Parker, chief executive at Holborn Assets, said: “Between 2005 and 2010, whilst an approved person at Aspire Personal Finance, Reynolds recommended a number of UCIS funds to his clients which were approved by the networks compliance department and promoted by the network.
“These funds included such investments as TEPs and off plan properties into SIPPs, as sold by some 10,000 other UK advisers in the noughties.
“Following the 2008 financial meltdown which caused the crash of many of these funds the FCA acted retrospectively to regulate.
“Initially, it was possible to mount a defence to these allegations and establish Mr. Reynolds innocence, but to continue would have meant further fees in excess of £250,000 and in the current climate of fear created by the FCA two key witnesses were too afraid come forward. Under these circumstances, Reynolds had no option but to settle.
“Reynolds is a very successful international adviser having spent two years with Globaleye and nine months with Holborn. With Holborn he must adhere to the same strict compliance procedures and centralised investment advice as our other 80 consultants and his clients are very happy with his service, we understand the same applied at Globaleye.”
Aspire Personal Finance, which was previously known as Positive Financial Strategies, went into liquidation in 2010.
Tim Searle, chairman at Globaleye, said: “We constantly enhance measures to ensure the people we employ, not just advisers, are qualified for the role and that their credentials reflect accordingly.
“Through the use of complex platforms like Dow Jones Data Checker to readily available data sources like the internet, these are great tools to support in-house HR, Recruitment and Compliance departments.
“The onboarding process should require a whole host of information over and above the usual CV and it is the responsibility of said departments to ensure all the boxes are ticked before anyone can be offered a position.
“Globaleye are fortunate to have these functions in place due to our global presence/size and we recognize the challenges smaller companies must endure when confidently selecting candidates.”
