Under fire self-invested personal pension (SIPP) provider Liberty SIPP has been accused putting pension investments at risk when allowing clients to invest in unregulated overseas carbon credits schemes.
Law firm Anthony Philip James & Co reported that up to 560 people have lose more than £12m after Carbonex and Aston Lloyd failed through Liberty SIPP and other SIPP providers, with methods on how to recover the lost money now being explored.
It is also alleged that a firm of solicitors acting on behalf of the investment companies may have been viewed by investors as lending credibility to the transactions.
Commenting, Anthony Philip James & Co financial mis-selling solicitor said: “Despite the Financial Conduct Authority (FCA) issuing warnings about the potential that carbon credit schemes were a sham, Liberty SIPP and the other providers involved failed in their due diligence process and failed to treat its customers fairly.
“Liberty SIPP allowed these investments within its SIPP where they have no intrinsic value and the regulation around these types of investments is not robust enough globally.
“Principle 2 of the FCA’s Principles for Business requires firms to ensure that they conduct and retain appropriate due diligence. This has not happened in this case and investors have lost out on millions due to being introduced to these unregulated investment firms.”
However, though SIPP operators are not ultimately responsible for recommendations given by third-party financial advisers, Liberty SIPP may have breached FCA SIPP Operator Guidance. The regulator has set an expectation that SIPP operators should have procedures in place to properly vet introducers and identify possible instances of financial crime or consumer detriment.
Many Liberty SIPP clients now face significant losses as a result of the investments being allowed to be made within their SIPP.
The investments into various Carbon Credit schemes were not appropriate for a number of the people contacted and they now face a battle to get back the money lost.
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