The FSA has censured and banned Sipp operator HD Administrators partner Michele King for failing to fulfil her regulatory responsibilities.
King would also have been fined £20,000 were it not for evidence the penalty would cause serious financial hardship.
King became a partner at HD Administrators in August 2008. She had previously been employed as an accounts administrator carrying out minor administrative tasks at the firm.
The FSA says despite taking on a significant influence function at HD Administrators, King took no steps to understand or fulfil her regulatory responsibilities. She also failed to discharge her responsibilities as an approved person through her lack of understanding the nature of the company’s business and its regulatory responsibilities. She did not keep herself involved in, or informed about, the management decisions at the firm.
The regulator’s case against King is part of a wider investigation into the events at HD Administrators which led to its winding up in June 2012. HD Administrators is now in the hands of the Official Receiver in Manchester. The Serious Fraud Office and Nottinghamshire Police are currently investigating allegations of criminal activity at an unregulated company connected to HD Administrators.
Fundweb’s sister publication Money Marketing revealed in March that investors used Sipp firm HD Sipp to invest their pension savings in a scheme where funds obtained through IFAs, property agents and accountants were used to facilitate foreign property developments. Money Marketing reported at the time that investors could be facing losses of up to £60m following the liquidation of specialist property investment firm Arck LLP, which operated the scheme.
HD Administrators operated the HD Sipp scheme which had around 420 members. The FSA suspended HD Administrator’s permission in March, preventing it from operating and paying out any funds, after Nottingham Police arrested two of the HD Sipp trustees. One of the trustees is also a partner at HD Administrators.
FSA head of retail enforcement Bill Sillett says: “While we have not imposed a fine because it would place her into serious financial hardship, Michele King should be under no illusion about the seriousness of her wrongdoing.
“What we have found shows King was totally out of her depth in her role as partner at HD Administrators and failed to take her responsibilities seriously. Further, her lack of involvement in the decision making at HD Administrators meant she was a bystander while events at the operator got out of hand.”
He adds: “All approved persons, but especially those holding a significant influence function, must understand and fulfil their role and meet their regulatory obligations. If they do not, their customers and the wider market are put at risk.”