The Pensions Regulator in Britain has banned two pension fund trustees for investing in “exotic, high risk and suspected scam investments,” such as eucalyptus farms, Cape Verde hotel rooms, and parking spaces in Dubai and Glasgow.
TPR banned Stephen Alexander Ward and Anthony Salih, who were directors of Dorrixo Alliance (UK) Limited, which acted as trustee for the London Quantum pension scheme. The regulator’s Determinations Panel said both men lacked the competence and capability to be trustees, and in particular described Ward as reckless and lacking in integrity.
“Ward’s conduct was reckless in all the circumstances, and amounted to turning a blind eye to a significant issue and failing to ask obvious questions,” said the independent Determinations Panel in its ruling. “Given his 40 years of experience in the pensions industry… it is difficult to believe that Mr. Ward was unaware of the risks that his actions and failings posed to members, and the likelihood that they breached the requirements of pensions legislation.”
Both men were warned that they could be jailed if they ever act as pension trustees again.
According to TPR, hundreds of people were approached by introducers being paid a commission to persuade pension holders to transfer their funds to the London Quantum pension for investment in “exotic sounding” propositions. More than 90 people took the bait and transferred over £6 million worth of savings to the pension.
It also said hundreds of thousands of pounds were then paid out to Dorrixo, to introducers, and to a business providing administration and marketing services, all the while the members believed their funds were being put into low- or medium-risk investments.
“Stephen Ward and Anthony Salih put millions of pounds of other people’s money at risk and have neither the knowledge nor the skills needed to run a pension scheme,” Nicola Parish, TPR’s executive director of frontline regulation, said in a release. “Trustees play a vital role as the first line of defense for pension schemes, but these two men allowed huge sums to be invested into high risk, exotic investments that bear all the hallmarks of being scams.”
TPR appointed Dalriada Trustees Limited as an independent trustee to the pension with exclusive powers.
“As this case shows, we will take action to replace trustees if we believe they are putting scheme funds at risk,” said Parish, “and will ban those who are not fit to perform such an important task—pursuing cases [all] the way through the courts if that is what it takes to get the right result.”
Tags: Dorrixo Alliance Limited, London Quantum, Pension, The Pensions Regulator