Wixted & Co Solicitors is representing several clients who have accused Carey Pensions of accepting business from unregulated introducers who sold investments that are now worthless.
Storage First Pods
In one particular case, Chris Hegarty, a solicitor at the firm, said an unregulated introducer in Spain facilitated investments into a scheme called Storage First Pods.
Hegarty said the introducer persuaded Wixted’s client, referred to as Mr Adams, to transfer his modest pension into the pod scheme.
“Since then, the storage pods his pension owns have fallen in value and so he has lost most, if not all, of his pension fund,” Hegarty told International Adviser.
Adams is due to appear in the High Court on 19 March for a four-day trial against Carey Pensions. It will be a test case for around 90 more clients with liabilities totalling £3m.
The claim
The introducer in the pods case, called CLP brokers, is not authorised or insured, Hegarty alleges.
Further, Wixted has accused CLP of being linked to Terry Wright “who has been on the Financial Conduct Authority (FCA) warning list since 2010″.
“Therefore there is no feasible way of recouping from this business,” he said.
Despite the inability to recoup from the business, Hegarty said the Financial Service and Markets Act 2000 provides for regulated businesses to bear the risk of dealing with unregulated introducers.
The firm is also accusing Carey Pensions of breaching the FCA conduct of business rules, which dictate a firm must act in a client’s best interest, and for operating a joint enterprise with a unregulated introducer.
The case, Hegarty said, could be a turning point for how Sipp cases are dealt with going forward, as it covers an area of law not yet tested by the courts.
Sipp case precedent
Additionally, the claim may set a precedent for Berkeley Burke case, where at least 77 Sipp investors have joined forces to sue a Sipp administration for mis-selling. The number of claimants is expected to grow significantly.
“This is something which the court has not addressed directly previously, the other two cases related to an unregulated lender and a regulated insurance broker, therefore this has the prospect of clarifying how all of these cases are dealt with going forward,” Hegarty told IA.
The case also follows the UK Financial Services Compensation Scheme (FSCS) announcing on 19 January that three Sipp operators – Stadia Trustees; Brooklands Trustees; and Montpelier Pension Administration Services – were in default.
The FSCS said the operators would have to pay compensation to an eligible claimant if it is satisfied their application for compensation relates to a protected claim.
A protected claim is a valid claim made in respect of a civil liability owed by the firm (or successor) to the claimant (or successor).
Hegarty said Wixted was “very hopeful” that the court will both award its client compensation and also clarify the law so that other cases can be dealt with much more swiftly and certainly.
Carey Pensions did not respond to a request for comment.
