The Financial Conduct Authority v Avacade Ltd & Ors

The Financial Conduct Authority v Avacade Ltd & Ors

Avacade and AA carried on regulated activities without authorisation by making arrangements and giving advice with a view to consumers buying or selling securities, made unauthorised financial promotions, and made false or misleading statements about the risk and nature of investments. The individual defendants were knowingly concerned in these contraventions due to their knowledge and involvement in the business models and operations. Exemptions under the RAO and FPO did not apply due to the receipt of commissions and lack of independent advice or discretion.

Parties
Claimant: The Financial Conduct Authority; First Defendant: Avacade Limited (In Liquidation) (trading as Avacade Investment Options); Second Defendant: Alexandra Associates (UK) 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
30 June 2020
Procedural Posture
Civil / Judgment After Trial
Outcome
Judgment for the Claimant (FCA) against all Defendants to the extent identified in the judgment.
Legal Topics
Perimeter Breaches, Financial Promotions, False or Misleading Statements, Restitution Orders, Knowingly Concerned Liability
Financial Services Regulation Civil Procedure Perimeter Breaches Financial Promotions False or Misleading Statements Restitution Orders Knowingly Concerned Liability

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Parties

The Financial Conduct Authority

Claimant

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

First Defendant

Alexandra Associates (UK) 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 / Judgment After Trial

Legal Issues

  1. 1 Whether Avacade and AA carried on regulated activities without authorisation in breach of FSMA s.19
  2. 2 Whether Avacade and AA made unauthorised financial promotions in breach of FSMA s.21
  3. 3 Whether Avacade and AA made false or misleading statements in breach of FSMA s.397 and FSA 2012 s.89

Ratio Decidendi

Avacade and AA carried on regulated activities without authorisation by making arrangements and giving advice with a view to consumers buying or selling securities, made unauthorised financial promotions, and made false or misleading statements about the risk and nature of investments. The individual defendants were knowingly concerned in these contraventions due to their knowledge and involvement in the business models and operations. Exemptions under the RAO and FPO did not apply due to the receipt of commissions and lack of independent advice or discretion.

Court Disposition

Judgment for the Claimant (FCA) against all Defendants to the extent identified in the judgment.

Orders

  • Declarations of contraventions of FSMA s.19, s.21, s.397 and FSA 2012 s.89 by Avacade and AA
  • Declarations that Craig Lummis, Lee Lummis, and Ray Fox were knowingly concerned in Avacade's contraventions; Craig and Lee Lummis in AA's contraventions