Mis-selling Investments: FCA Bans and Fines Paul Reynolds for 'Reckless and Deliberate' Recommendations

The Financial Conduct Authority has banned former financier Paul Reynolds from the industry and has fined him £290,344 for recklessly recommending high-risk investment products to eight retail clients, when he knew that he could not justify their suitability.

The FCA reiterated he is banned from performing any function in relation to any regulated activities on the basis "he is not fit and proper because he lacks integrity" for this actions between 2005 and 2010 while he was an approved person at Aspire Personal Finance Limited (previously known as Positive Financial Strategies Limited).

"People go to advisers because they want expert help to make the most of their money. They should be able to trust advisers to act in the customer's best interest and recommend products which will suit their needs," said Tracey McDermott, director of enforcement and financial crime at the FCA.

"It is critical that firms and individuals put their customers' interests first."

Reynolds applied to the tribunal for an order preventing the FCA from publishing the decision notice but that application was unsuccessful.

He has since referred the matter to the upper tribunal (the tribunal) where he and the FCA will each present their case.

The tribunal will then determine the appropriate action for the FCA to take and it may uphold, vary or cancel the FCA's decision.

The Tribunal will hear Mr Reynolds' case on 8 and 9 December 2014.

What Did He Do?

The FCA said Reynolds' actions were particularly serious because the eight clients he had duped were on low incomes and had little or no investment experience.

The watchdog said Reynolds not only "recklessly" recommended high-risk products but he also knowingly involved in the falsification of the signatures of two clients on sophisticated investor certificates to suggest the investment could be legitimately promoted.

He also deliberately made investments on behalf of two clients without their knowledge or authorisation and produced inflated valuations of clients' investments in an attempt to mislead them and conceal the poor performance of the investments he had recommended.

The regulator added Reynolds "deliberately attempted to mislead the FCA by retrospectively creating various documents and misrepresenting that they were contemporaneous".