A SCOTS financial adviser who persuaded dozens of clients to sign up to unsuitable high-risk schemes has been fined £60,000 and banned from practising.
Frank O'Donnell advised 57 of his clients to invest in unregulated schemes, including wine and crop stocks and unlisted shares, when they were "clearly unsuitable".
Almost two-thirds of the customers invested more than 75% of their money in the Unregulated Collective Investment Schemes (UCIS), while some risked their entire pension fund.
Mr O'Donnell, owner of West Lothian-based P3 Wealth Management Ltd, is now prohibited from "performing any function in relation to any regulated activity in the financial services industry".
The Financial Services Authority (FSA) has also been banned him from practising.
Tom Spender, head of retail enforcement at the FSA, said: "O'Donnell had absolutely no understanding of the regulatory restrictions in place which prohibit advisers from selling UCIS to the vast majority of UK retail investors.
"He also completely failed to make recommendations that were suitable for his clients' individual needs and circumstances.
"Such mis-advice cannot continue."
One of Mr O'Donnell's clients was a woman who was reliant on state benefits after retiring on ill-health grounds. She was advised to invest more than 90% of her available pension fund into UCIS and other unregulated schemes.
The FSA said it could not put a figure on how much the clients, all from Scotland, had lost as a result of Mr O'Donnell's mis-selling.
A spokeswoman said: "Almost all of Mr O'Donnell's clients have withdrawn from the investments but we cannot estimate how much they have lost. They would now be best advised to speak to another adviser as to how they should proceed."
She added that anyone affected may also be able to get help from the FSA compensation scheme.
The regulator claimed Mr O'Donnell's actions were aggravated by the fact he completed an additional £185,306 of UCIS business just four days before he confirmed to the FSA he would stop selling these products. He also carried out UCIS investment applications for two of his customers after agreeing to stop.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article