Context
The FCA has decided to fine Mr Reynolds of Active Wealth (UK) Limited (Active Wealth) £2,212,316 and ban him from working in financial services. Mr Deeney was fined £397,400 and banned from working in financial services.
Key points to note
Mr Reynolds had a clear disregard for customers’ interests in favour of his own personal gain, dishonestly advising over 670 customers to place their money into investments he knew weren’t suitable for them. He dishonestly established, maintained and concealed a business model which incentivised recommending products which produced the highest commission for the adviser rather than the best outcome for the customer, and exploited this to the detriment of Active Wealth’s customers so that he could receive £1.01m in prohibited commission payments.
These payments were funnelled via companies connected to Mr Reynolds and were intentionally designed to disguise their true origins. Mr Reynolds dishonestly misled the FCA and recklessly allowed the destruction of evidence relevant to its investigation.
Mr Deeney made personal financial gains exceeding £200,000 by providing Active Wealth customers with unsuitable advice so that he could dishonestly receive banned commission payments. Mr Deeney’s misconduct then continued at Fortuna Wealth Management Limited (Fortuna), a firm he established which purchased Active Wealth’s goodwill and client database, where he repeatedly sought to mislead the FCA about his role in advising customers to invest in high-risk investments.
Therese Chambers, FCA Joint Executive Director of Enforcement and Market Oversight, said: “This is one of the worst cases we have seen. Mr Reynolds, who allowed evidence to be destroyed and who has consistently sought to evade accountability, and Mr Deeney, lied and lied again. First, to dupe people into leaving safe pension schemes and placing money meant for their retirement in unsuitable, high-risk investments. Then to try and hide their misconduct from us. Their motivation was based on self-enrichment. Such people have no place in our industry.”
Next actions
None – for information and awareness.