A mortgage boss and former senior partner at wealth manager St James’s Place has been banned and fined £300,000 by the FCA.
Between 2004 and 2010, Peter Carron, formerly a senior partner at St James’s Place, advised 11 clients to invest a total of £2.4m in three companies of which he was director and majority shareholder without adequately disclosing this fact to them.
Clients invested in mortgage broker Primrose Associates, online mortgage sourcing system Evaluate Technologies and Comment Technologies, a social networking technology firm.
The clients later lost £2.2m when the companies went into liquidation between May and August 2010. St James’s Place subsequently paid the investors £1.9m in compensation.
The FCA says Carron lacks honesty and integrity and has been banned from performing any function related to regulated activities in financial services.
The regulator says Carron misled clients about the likely performance of their investments, by guaranteeing a return or providing inappropriate financial projections of future returns.
Carron continued to reassure investors and advise them to invest, even when he knew his companies were in financial difficulties.
He also led clients to believe that the investments were approved or endorsed by St James’s Place, which was not the case.
Carron advised the clients to invest without assessing whether the investments were suitable for their needs, and failed to alert them to the possible risks.
FCA director of enforcement and financial crime Tracey McDermott says: “People go to advisers because they want expert help on how to make the most of their money. They are entitled to expect that their adviser will act in their best interests, not his own. Advisers should think very carefully and make clear and full disclosure if they are intending to advise clients to invest in ventures in which they have an interest.”
In August, Carron was banned by the High Court for 13 years from acting as a director or managing or controlling a company. An Insolvency Service investigation found Carron had submitted false returns to regulators.
The FCA says it has not criticised St James’s Place in relation to this matter.
A spokeswoman for St James’s Place says: “When the improper conduct was brought to the attention of St James’s Place we immediately commenced investigation and Carron’s contract was terminated.
“All clients affected were made aware of the situation so their individual circumstances could be managed and compensated appropriately.”