A City-based securities company linked to a wealth manager and three other appointed reps has gone into liquidation after FCA intervention, opening up possibility of at least £1.3m of claims to the Financial Services Compensation Scheme.

Alexander David Securities Limited (ADSL) entered creditors’ voluntary liquidation last week with BDO LLP appointed liquidators. 

The FCA said it had identified “serious concerns” at ADSL around compliance with the FCA’s rules and the Money Laundering Regulations. 

In the first FCA Supervisory Notice the regulator said that ADSL’s conduct, “appears to demonstrate that it poses a significant risk of harm to consumers.”

There are 32 open Financial Ombudsman Service claims agains the company totalling over £1.3m.

In its Supervisory Notice the FCA said that the Ombudsman Service notified the regulator that between June 2017 and December 2020, there were a total of 39 outstanding complaints lodged against ADSL. The firm did not appear to have enough cash to meet the claims.

Many of the complaints relate to allegations that one of ADSL’s approved representatives provided “unsuitable investment advice” to customers to move funds in their SIPP into debentures issued by a company with shares quoted on the Cyprus and Vienna Stock Exchanges. 

The FSCS has now categorised the firm as failed and is also investigating. It says the firm was involved in pensions and investments.

ADSL was linked to a number of firms which were appointed representatives of ADSL.

Among the firms was OS Wealth Management Limited which was an appointed rep from 25 May 2018 to 9 August 2018. OS Wealth is no longer an appointed rep and is no longer authorised by the FCA.

The FCA said that ADSL was an FCA regulated firm which was authorised to conduct investment related activities. It provided corporate finance advisory services including initial public offerings, secondary fund raisings, mergers and acquisitions and debt offerings. It also undertook some other unregulated activities.  

ADSL had four appointed reps for various periods of time. None of these are still appointed reps of ADSL. 

The firms (with dates for their appointed rep status) are:

• Beer & Young Limited (06/11/2015 to 15/03/2017)
• OS Wealth Management Limited (25/05/2018 to 09/08/2018)
• St Pauls Marketing Limited (12/10/2016 to 15/08/2017)
• Templeton Securities Limited (15/07/2013 to 19/08/2015)

ADSL also had permission to hold and control client money until 29 June 2020 when the firm agreed voluntarily to an FCA intervention requiring it to stop holding client money. 

On 29 April 2022 the FCA imposed a number of restrictions on ADSL and this was followed on 1 July by the firm going into voluntary liquidation.

• FCA’s First Supervisory Notice.