The Financial Services Authority (FSA) has fined Martin Rigney of Topps Rogers £117,330 and banned him from performing any function in relation to any regulated activity in the financial services industry. Rigney was a Partner and the only adviser working at Topps Rogers.
Rigney promoted and advised retail customers to invest in Unregulated Collective Investment Schemes (UCIS) without assessing their eligibility to receive UCIS promotions or explaining why his recommendations were suitable. As a result of his advice, customers invested a substantial proportion of their investment portfolios in these complex, high risk products when they were unlikely to be suitable. One of Rigney’s customers invested 89% of his investment portfolio in UCIS. Rigney also advised a retired couple to put 80% of their investment portfolio in UCIS to provide an income for their retirement.
Rigney also showed a serious lack of integrity. In May 2010, after he had agreed to stop promoting and advising on UCIS, he arranged a UCIS sale when he attempted to transfer two existing customers’ holdings in a UCIS to a new customer. He did not tell his customer that the UCIS he was recommending had been suspended in 2008.
Rigney also carried out discretionary portfolio management without his customers’ knowledge. He switched customers’ investments into UCIS without notifying them or obtaining their signatures prior to making the transactions. For example, two customers said they were away on holiday on the date that the dealing instruction forms were submitted and therefore could not have signed the forms.
Topps Rogers is now in liquidation and Rigney is bankrupt.
Tracey McDermott, director of enforcement and financial crime at the FSA, said:
“Martin Rigney demonstrated a serious lack of competence by promoting complex, high risk products to his customers when they were clearly not right for his clients’ needs. He also acted without integrity by continuing to promote UCIS when he had no permission to do so, and arranging UCIS sales without his customers’ knowledge. His actions show a fundamental disregard for the interests of his customers.
“Under Rigney’s watch, Topps Rogers advised 94 customers to invest over £12 million in UCIS. We have made our views on UCIS very clear: these high risk, complex products should not be promoted to the vast majority of retail investors in the UK. We will continue to take tough action against firms and senior management when they mis-sell these high risk products.”
Background
- The Final Notice for Martin Edward Rigney.
- Topps Rogers was a small independent financial advisory firm based in Sheffield. The FSA fined Topps Rogers £97,600 on 13 February 2012 for UCIS failings.
- This is the nineteenth enforcement case brought against an advisory firm for UCIS failings since 2011. A full list of all firms and individuals fined for failings in relation to UCIS.
- The FSA has published a consultation paper on UCIS, supervisory letters, final guidance on traded life policy investments, a thematic review of UCIS, guidance for small firms, consumer information on its website, and has also spoken publicly about UCIS. More information.
- Examples of UCIS include traded life policy investments, wine, crops, unlisted shares and timber. These assets may sometimes appear to offer better returns with less volatility than more usual investment types but they are actually higher risk investments. The risks they carry are often esoteric and difficult to assess. For example, they may be illiquid, difficult to value and susceptible to catastrophic loss of value. Governance controls can also be weaker than on mainstream investment vehicles, which may increase the risk of product failure and loss of capital for investors.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
- The FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013. The Financial Services Bill currently undergoing parliamentary scrutiny is expected to receive Royal Assent in late 2012 or early 2013, subject to the parliamentary timetable.