The Financial Conduct
Authority has banned Demetrios Hadjigeorgiou from holding senior management
positions in financial services and fined him £56,400 over failures at former
discretionary fund manager SVS Securities Plc.
The case has also
resulted in regulatory action outside the UK. Earlier, the Dubai Financial Services
Authority banned former SVS CEO Kulvir Virk from performing any function connected with
financial services in or from the Dubai International Financial Centre.
FCA Bans Former SVS Executive
Hadjigeorgiou was
SVS’s finance director before becoming CEO. He served in the role until shortly
before the firm entered special administration.
The FCA said
Hadjigeorgiou failed to properly manage SVS and protect customers’ interests.
The firm invested customer money, including pension savings, in high-risk
products while receiving significant payments from the companies that issued
them.
Hadjigeorgiou also
failed to challenge a decision to reduce the value of customers’ bond
investments by 10% when they sought to sell them. The reduction generated
£359,800 for SVS, while customers were not clearly informed about it. Some
consequently lost part of their pension savings.
The regulator found
that Hadjigeorgiou failed to exercise due skill, care and diligence in managing
SVS.
The latest action
follows an FCA Decision Notice that proposed an £84,600 penalty and a
prohibition order. Hadjigeorgiou referred the decision to the Upper Tribunal
but later settled with the FCA and withdrew his referral. The final penalty was
reduced to £56,400.
SVS Collapse Leaves 879 Customers
Exposed
SVS entered special
administration and was later dissolved. The FCA said 879 customers had invested
a combined £69.1 million in bonds through the firm. The bonds later defaulted,
leaving customers unlikely to recover more than a fraction of their investments.
The FCA also took
action against former SVS CEO and majority shareholder Virk and former head of
compliance David Stephen over their roles in the treatment of customer pension
funds. Virk was fined £215,500 and permanently banned from UK financial services.
Therese Chambers,
joint executive director of enforcement and market oversight at the FCA, said:
“Building up a pension for retirement is one of the most important
investments you can make.”
She added: “Where
senior leaders fail to put customer interests first, we will act.”
This article was written by Tareq Sikder at www.financemagnates.com.
Source link
