The Financial Conduct Authority has secured bankruptcy orders against directors of Avacade and Alexandra Associates in a multimillion-pound compensation case.
The firms were introducer companies that promoted unregulated investments to consumers.
Thousands of clients were encouraged to transfer their pensions into self-invested personal pensions (Sipps).
The companies, which were managed by Craig Lummis and his son Lee Lummis and Raymond Fox, received commissions from the investments.
In 2020, the FCA took legal action against Avacade and Alexandra Associates and their directors.
The High Court, in a judgement on 30 June 2020, ordered the two companies and three directors to pay a total of £10,715,000 in restitution to the Sipps investors who were left out of pocket.
The court found that the firms’ activities were unlawful as they had engaged in the regulated activities of arranging and advising on investments, made unapproved financial promotions through their websites, promotional material and in telephone calls to consumers and made false or misleading statements.
The court also found that the Lummis’ and Mr Fox were knowingly concerned in Avacade’s and AA’s breaches.
A further hearing took place on 31 July 2020 to determine the amounts the defendants should pay in restitution for their roles in the unlawful activity.
The court ordered the defendants to pay the following sums: £10m (Avacade), £715,000 (AA), £2.5m (Craig Lummis), £2.5m (Lee Lummis) and £1.7m (Raymond Fox).
The FCA said it has secured bankruptcy orders against Lee and Craig Lummis after they failed to satisfy the restitution order. The regulator obtained the orders on 21 November 2023.
In an update on Friday (February 16), the FCA said the Official Receiver will investigate the financial affairs of the bankrupts and administer their estates.
The third director of Avacade, Raymond Fox, was previously made bankrupt on 19 August 2020.
The FCA secured a winding-up order against Alexandra Associates (U.K.) Limited on 22 February 2022 and the company was subsequently dissolved on 10 April 2023.
