Financial adviser banned and fined £300,000 after clients lost out investing in companies he controlled

Between 2004 and 2010, Peter Carron, formerly a senior partner at St James’s Place Wealth Management Plc (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. The clients later lost approximately £2.2m when the companies went into liquidation between May and August 2010. St James’s Place subsequently paid these 11 investors £1.9m in compensation.

As a result, the Financial Conduct Authority has concluded that Carron lacks honesty and integrity, fined him £300,000 and banned him from performing any function related to regulated activities in financial services.

Tracey McDermott, director of enforcement and financial crime, said:

“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.”

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. What is more, 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.

In August 2014, Carron was banned by the High Court for 13 years from acting as a director or managing or controlling a company.

The Financial Conduct Authority has not criticised St James’s Place in relation to this matter.

Notes for editors

1. Final notice for Peter Thomas Carron[1].
2. The three companies into which investments were made were:
   
   1. Primrose Associates Limited, a mortgage broker authorised by the FCA;
   2. Evaluate Technologies Limited, an online system for sourcing mortgages; and
   3. Comment Technologies Limited, which set out to develop the technology to launch social networking sites aimed at businesses
3. Insolvency Service press release: 13 year ban for London director and financial adviser who misled investors[2].
4. On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
5. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
6. Find out more information about the FCA[3].