The Financial Conduct Authority v Avacade Ltd & Ors

The Financial Conduct Authority v Avacade Ltd & Ors

The court granted interim restitution orders against all five defendants based on the amounts actually received by each as commissions/fees, finding this a reasonable and fair proxy for investor losses and/or profits for the purposes of s.382 FSMA and CPR 25.7. The court found the split trial structure did not preclude such orders, as findings on sums received were made at the first trial. Final injunctions were granted against the second to fifth defendants due to the real risk of repetition of prohibited behaviour. No stay of execution was granted, as the FCA's undertaking not to pursue insolvency/bankruptcy pending appeal protected the defendants' position.

Parties
Claimant: The Financial Conduct Authority; First Defendant: Avacade Limited (In Liquidation) (trading as Avacade Investment Options); Second Defendant: Alexandra Associates (U.K.) Limited (trading as Avacade Future Solutions); Third Defendant: Craig Stanley Lummis; Fourth Defendant: Lee Edward Lummis; Fifth Defendant: Raymond George Fox
Jurisdiction
England and Wales
Judgment Date
07 August 2020
Procedural Posture
Civil (financial Regulation/restitution/injunction) / Post Trial, Consequential Orders Following Judgment
Outcome
Interim restitution orders granted against all defendants; final injunctions granted against second to fifth defendants; stay of execution refused.
Legal Topics
FSMA Contraventions, Restitution Orders, Interim Payments, Injunctions, Split Trial Procedure
Financial Regulation Civil Procedure Restitution Injunctions FSMA Contraventions Restitution Orders Interim Payments Split Trial Procedure

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Parties

The Financial Conduct Authority

Claimant

Avacade Limited (In Liquidation) (trading as Avacade Investment Options)

First Defendant

Alexandra Associates (U.K.) Limited (trading as Avacade Future Solutions)

Second Defendant

Craig Stanley Lummis

Third Defendant

Lee Edward Lummis

Fourth Defendant

Raymond George Fox

Fifth Defendant

Procedural Posture

Civil (financial Regulation/restitution/injunction) / Post Trial, Consequential Orders Following Judgment

Legal Issues

  1. 1 Whether interim restitution orders (IROs) should be granted against the defendants under s.382 FSMA and CPR 25.7
  2. 2 Whether final injunctions should be granted against the individual and corporate defendants under s.380 FSMA and/or s.37 Senior Courts Act 1981
  3. 3 Whether a stay of execution of IROs should be granted pending appeal

Ratio Decidendi

The court granted interim restitution orders against all five defendants based on the amounts actually received by each as commissions/fees, finding this a reasonable and fair proxy for investor losses and/or profits for the purposes of s.382 FSMA and CPR 25.7. The court found the split trial structure did not preclude such orders, as findings on sums received were made at the first trial. Final injunctions were granted against the second to fifth defendants due to the real risk of repetition of prohibited behaviour. No stay of execution was granted, as the FCA's undertaking not to pursue insolvency/bankruptcy pending appeal protected the defendants' position.

Court Disposition

Interim restitution orders granted against all defendants; final injunctions granted against second to fifth defendants; stay of execution refused.

Orders

  • Avacade Limited to pay £10,000,000 to FCA as interim restitution order.
  • Alexandra Associates (U.K.) Limited to pay £715,000 to FCA as interim restitution order.