Self-invested personal pension (SIPP) provider Carey Pensions has become the subject of a fresh legal challenge, facing a claim it failed to undertake the required due diligence when accepting SIPP investments.
Solicitor Anthony Philip James & Co (APJ) is bringing the case on behalf of Mr R, who lost £30,000 after investing into Green Oil Australia through a Carey Pensions Sipp. It has said Mr R decided to make the investment following communication with an unregulated introducer, who had cold-called him.
A spokesperson for Carey Pensions told RP’s sister publication Professional Adviser the case in question was time-barred, and the firm had not been issued with any court proceedings.
Green Oil Australia was an unregulated collective investment scheme (UCIS) that has since failed. The parent company – Green Oil Plantations – entered administration in 2013, after raising some £24.4m, mainly through SIPPs.
In 2015, Mr R took the case to the Pension Ombudsman Service (POS), which found that he was poorly advised by the unregulated introducer, and that it was questionable whether a SIPP was the appropriate pension vehicle for a fund of £30,000, or indeed if Green Oil Australia was a suitable investment for his circumstances.
Despite expressing concerns, the POS found the Financial Conduct Authority (FCA) guidance that SIPP providers monitor and bear responsibility for the quality and type of business introduced to them did not apply in Mr R’s case.
APJ has taken the view, however, that this directly conflicted with the FCA’s written submission to the court in the Berkeley Burke judicial review, which is due to be heard on 10 October, and that “a court will find Mr R is owed compensation by Carey Pensions for his losses”.
APJ’s case against Carey Pensions is still in its very early stages, with the solicitor having now issued documents to the court that suggest it would like to bring a case against the SIPP provider.
‘Breach of rules’
APJ solicitor Glyn Taylor said: “In its written submission in the Berkeley Burke judicial review, the FCA specifically states that at all material times, the Financial Services Authority’s thematic review report in 2009 highlighted the failure to undertake due diligence is a breach of the regulatory rules to act honestly, fairly and professionally.
“We expect the Court to uphold the decision made against Berkeley Burke and therefore we are confident a Court will also find Mr R was failed.”
A decision on the Adams v Carey Pensions case, which saw a lorry driver take on the SIPP provider after he lost money when he invested in an unregulated scheme via his SIPP, is expected within the coming weeks.
Earlier today (9 October) STM Group confirmed it had taken formal steps towards buying Carey Holdings – the parent company of Carey Pensions – nothwithstanding its legal issues.