St James’s Place (SJP) has been forced to shell out more than £75,000 ($96,185, €81,780) to a client who was convinced by a rogue adviser to pour their savings into a friend’s start-up that went bust.
Former SJP adviser Philip Cox, who was at the firm for a decade until May 2019, convinced 17 clients to invest £1.4m in Green World Innovations between 2014 and 2019.
The company, set up by one of Cox’s school friends, went bust last October.
British newspaper The Sunday Times reported in March the Financial Conduct Authority was investigating Cox on the back of customer complaints.
SJP launched its own internal probe shortly after, but ultimately concluded it was not responsible for customer losses on the basis the investment was not approved by SJP.
But several victims interviewed by The Sunday Times, including a couple in their 80s who ploughed £500,000 into Green World over three years, and a breast cancer survivor; claimed they only invested because they believed Cox was acting as a representative for the wealth manager.
Cox communicated with clients using SJP company emails and letterheads.
Financial Ombudsman Service
Complaints were then sent to the Financial Ombudsman Service (FOS) which found in favour of a sole complainant, Jon Blore, the British newspaper reported on 21 September.
The ombudsman ordered SJP to refund the £75,000 that the 47-year old musician had invested, plus lost returns, and pay £300 for “trouble and upset”.
It found that Blore was entitled to his money back because Cox had persuaded him to transfer money out of some SJP-approved products into Green World, which counts as regulated activity for which SJP is responsible.
Other investors put money into the start-up from their cash savings and therefore were not entitled to compensation from SJP.
SJP did not dispute the FOS’ findings and told International Adviser that it had nothing further to add.
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