FCA ordered to pay compensation to banned IFA
The FCA has been ordered to pay thousands of pounds to the ex-chief executive of a collapsed IFA firm.
The ruling, by Judge Tim Herrington at the Upper Tribunal, relates to the FCA’s conduct against Alistair Burns, formerly of TailorMade.
The decision from the Upper Tribunal showed the watchdog had caused a delay to proceedings in a case in which Mr Burns was accused by the FCA of pension transfer suitability failures.
The delay led to the regulator being ordered to pay him more than £4,000.
A transcript of the decision from 26 January revealed Judge Herrington rejected a number of claims Mr Burns, who represented himself, had made against the conduct of the regulator.
But the Judge did agree that the FCA had failed to establish early enough at what point the statute of limitations concerning the advice Mr Burns gave started to run.
The tribunal heard this impacted settlement talks with the former IFA, who was banned from holding any senior management position in financial services and fined initially £233,600.
Judge Herrington said: “I have decided that in the circumstances it is appropriate that I should make a limited costs order.
“To do so will send out an important message to the [FCA] that, even in circumstances of what is found to be serious misconduct on the part of the applicant, which I accept is the position here, it is imperative that all subjects of investigation and enforcement proceedings should be treated fairly and reasonably.
“There have been a number of significant instances in this case where I have found that the [FCA] has fallen below the standards that should reasonably be expected of it.”
Awarding Mr Burton the cash the Judge said: “I accept the Authority’s calculations and direct that the Authority pay to Mr Burns £4,440.55 in respect of the costs he has incurred in relation to the proceedings arising out of his reference.”
Mr Burns was chief executive of advice firm TailorMade Independent Ltd (TMI) which failed to give adequate personal recommendations to clients on pension transfers into SIPPs.
He was originally handed a £233,600 penalty by the FCA in 2016, which was reduced on appeal to £60,000
The compensation bill for his failed business could hit £106.5m, according to the FSCS.
So far, more than £55.6m has been paid by the Financial Services Compensation Scheme for claims upheld against TMI.
This does not cover all the losses suffered by investors, which the FSCS assessed to be more than £106.5m.
TMI gave advice to 1,661 customers on putting £112m into alternative investments which were not normally permitted in pensions.