Sipp provider Berkeley Burke has told the High Court that it has no legal responsibility to investigate a client’s mis-sold investments.
Wayne Charlton first took action against the Sipp provider in 2014. The claimant lost part of his pension after investing with fraudulent company Sustainable AgroEnergy.
Sustainable AgroEnergy was a forestry scheme. The scheme sold investments in a Cambodian plantation. Investors were guaranteed high returns with low risk, which is a common scam technique. However, the land being sold did not exist and many fell victim to the scheme.
The scheme went into liquidation in 2012 and more than 250 people were left out of pocket. The company scammed a total of £23m from investors. Three directors were later convicted to a total of 28 years in prison.
Berkeley Burke ruling
In 2014, the Financial Ombudsman Service (FOS) ruled that Berkeley Burke had a duty to carry out advisor-style due diligence on their client’s investments. As a result, the court ruled in Mr Charlton’s favour.
However, Berkeley Burke argued that this was not their responsibility. This is because the investment was made before the client opened an account with a Sipp provider.
While the FOS initially ruled that it was the responsibility of Berkeley Burke to assess all of their client’s investments, the Sipp provider disagrees. Berkeley Burke say this was not a legal requirement at the time and this was made clear in its company policy.
A legal representative for Berkeley Burke said: “The view they took was that it was not their responsibility – they set out clearly that they are not going to be responsible. That is the battle ground.
“They say from the outset, ‘we are not going to investigate,’ that they will not undertake such an investment enquiry.”
APJ and Berkeley Burke
Berkeley Burke hit the headlines earlier this year when they were accused of “mis-selling” Sipps. Hundreds of investors took legal action against them. Clients alleged that they lost money by investing their pension pot with the Sipp provider.
APJ clients are involved in this litigation.
Our expert litigator, Glynn Taylor said earlier this year: “The FCA reiterated this view that Sipp operators could not shirk regulatory responsibilities towards their clients, regardless of whether there was an execution-only contract in place, during the Adams v Carey Pensions case.”
Did you invest in a forestry scheme that promised high returns and low risk? You may have fallen victim to financial mis-selling. Get in touch with our experts today, as you could be owed compensation.