Lisa Campbell, executive director of Campbell and Associates, can no longer carry out any regulatory activity without the FCA’s written consent.
The firm, which provides mortgage, pension and investment advice, was ordered to cease all regulatory activities in a supervisory notice issued by the FCA on 10 February.
The company was required to write to its clients within 72 hours of the notice to tell them of the restrictions and preserve records related to its regulatory activities. The FCA also asked the firm not to withdraw, dispose of, transfer, deal or diminish the value of its assets.
The notice was down to concerns the regulator had over Campbell and Associates’ conduct as well as a suspicion that Campbell had misappropriated £1.5m of a client’s funds and failed to repay the client as promised.
The firm does not have the regulatory approval to hold a client’s funds.
The client’s funds
In July last year, a client transferred £1.5m to the firm’s bank account after they were advised to invest in bonds which were set to mature in January 2023.
The client was told that the funds would be invested in bonds issued by a bank and was given documents to prove the investment had been made. However, the bank in question confirmed that it does not offer such bonds and has no record of the investment relating to the client.
The FCA obtained Campbell and Associates’ bank statements and found the funds had not been invested. However, the statements showed that between July 2022 and January 2023 the money was transferred to the personal accounts of the director or used to purchase a property for Campbell to live in.
The client asked for their investment to be repaid on numerous occasions as planned, which in response Campbell told them to “roll over” the investment, informed them that the repayments had been made and said the repayments had been made but were held up. Campbell also told the client that the investment had been accidentally rolled over and could not be repaid.
The FCA’s analysis of the firm’s accounts found that the funds had been misappropriated and the firm did not have enough money to make the repayment.
Campbell and Associates later repaid part of the funds, but the majority has not returned to the client, along with any interest accrued.
Campbell also told the client that she would meet with the FCA to fix the issue, but she did not contact the regulator as claimed.
At the time, the FCA said it had “serious concerns about the firm’s ability to meet the threshold conditions” and considered it to be “failing or likely to fail”.
Removed permissions
Despite being served a notice in February, the FCA received information on 28 March which suggested that Campbell had been in communication with a client.
The FCA said it was concerned that the interaction between 22 and 23 March may have amounted to financial advice, which neither the firm nor Campbell is approved to provide.
Campbell was found to be interacting with another client on 24 March, which the FCA said also appeared to fall under the scope of financial advice.
The FCA said to protect consumers, it was necessary for the restrictions to remain in place indefinitely.
Campbell has the right to make a written or oral representation to the FCA and the right to make a reference to the Upper Tribunal regarding this.
