29th March 2010

Bad apple?

I was quite amazed to read in Money Marketing that a Lancashire based financial adviser has been jailed for five years after being convicted of defrauding clients out of more than £600,000.

It is reported that John Williams, 71, who had run Acorn Marketing Services in St Annes, was convicted of a series of fraud offences when he appeared before Preston Crown Court. He had denied the charges.

During the three week trial the court heard that Williams had operated a Ponzi scheme where money from new investors was used to pay out those who had invested earlier.

The police investigation showed that between 1993 and 2008, a total of 22 investors lost £640,000 after investing with Williams. Some investors lost their life savings and their redundancy pay and none of the money has ever been seen again.

It is heartening to see that individuals like this are dealt with severely; their actions bring discredit to the IFA profession at a time when all are under the spotlight from the FSA.

But, here is the rub; there is no mention in this report of the FSA, or indeed the PIA and maybe even FIMBRA. Are we to assume therefore that this individual did not appear on the radar of ANY of the aforementioned regulatory bodies? On the basis that he must have handled client money, what went wrong?

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