However, the penalties have been slashed to £19,200, which represents “all of their available assets”, which the men must pay to the Financial Services Compensation Scheme.

The three men are Anthony Cuming, Kyle Jones and Steven Sahota.

They were all involved in a scheme which saw unwitting pension holders being persuaded to switch their pension pots to a fund which included high-risk, illiquid bonds. The scheme involved the men syphoning off huge marketing fees from the pension funds.

Mr Cuming was an investment adviser involved in pension transfers at Cardiff-based IFA firm Grosvenor Butterworth (Financial Services) Limited (FRN 152754) between January 2015 and November 2017. Mr Jones reported to Mr Cuming at Grosvenor Butterworth during the period.

Mr Sahota was a discretionary fund manager at London-based Beaufort Securities (FRN 155104) from January 2015.

Beaufort had launched a white-label SIPP - the Beaufort SIPP - in March 2014 and had begun carrying out discretionary fund management for pension trustees whose underlying pension holders were retail clients.

In his role Mr Sahota worked directly with IFAs who advised pension holders about transferring their existing pensions to the Beaufort SIPP. By October 2016 at least 1,063 pension holders had had their £53m funds switched to the Beaufort SIPP’s strategic income portfolio, which was designed to invest in low-risk corporate bonds.

At some time during the period all three men became involved in a scheme in which an unnamed ‘unregulated individual’ identified businesses looking to raise cash and promised them “significant capital” through the Beaufort SIPP’s strategic income portfolio.

The businesses issued high-risk illiquid shares or bonds for the capital but in return had to pay marketing fees, including introducer fees and commission, which were shared by the participants in the scheme.

Grosvenor Butterworth advised at least 182 customers, which had around £14m in their pension pots, to switch their pensions to the Beaufort SIPP, which included the inappropriate high-risk bonds.

In total around £5.9m was paid in marketing fees which had been taken from pension holders funds while the scheme was in operation, with all the cash handed to the various participants in the scheme, with some attempting to hide the money in their personal bank accounts.

Mr Cuming received at least £780,000, from which he kept £433,000, after handing £177,900 to Mr Jones and £126,300 to Mr Dahota.

Mr Jones received at least £310,000, keeping £271,000 for himself after paying £39,000 to introducers.

Mr Dahota was handed more than £1.25m.

According to Companies House records, Grosvenor Butterworth had been incorporated in 2003 but entered liquidation in January 2018 and was pronounced failed by the FSCS in May 2018 after the FCA said recommendations it had given clients to invest in the Beaufort Securities were “unsatisfactory.”

By March 2024 the FSCS had paid out £4m in compensation to victims of the firm.

After its investigations the FCA this month declared all three men “lack integrity” and were “not and fit proper persons to perform any functions related to any regulated activity.”

It imposed a penalty of £1,691,259 on Mr Cuming for various breaches, which it agreed to not enforce provided Mr Cuming pays £2,000 to the FSCS, a figure that represents all of his available assets.

For various breaches Mr Jones was penalised £443,153, which will not be enforced provided he pays £7,200 to the FSCS.

Mr Sahota’s financial penalty for his breaches was £1,782,343, but it won’t be enforced as long as he pays £10,000 to the FSCS.

The three men have until 30 June 2025 to make their payments to the FSCS or face the financial penalties being enforced.