Tribunal upholds £2m FCA fine for 'corrupt and dishonest adviser'

The FCA’s decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal.

The regulator's investigation found that Reynolds was dishonest when he gave pension transfer advice and investment recommendations to his customers, causing them significant harm.

Reynolds encouraged British Steel Pension Scheme members to transfer out of their defined benefit pension scheme, despite knowing that the advice was wholly unsuitable. He also advised his customers to invest in high-risk and unsuitable products while at the same time hiding high exit fees and forging documents.

His misconduct exposed hundreds of people to serious financial loss. Over £17.6 million has been paid in compensation to more than 470 affected customers, many of whom suffered losses in excess of statutory compensation limits. 

In addition, Reynolds let two unapproved people give pension advice, putting customers at risk. When confronted with his misconduct he lied to regulators, allowed important evidence to be destroyed, and moved his family home into a trust to avoid paying his debts. 

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “Mr Reynolds’ misconduct was the worst we saw out of all the British Steel Pension Scheme cases, and he caused untold damage to his clients. He acted in a way that was corrupt and dishonest, putting his own profits before people’s pensions and acting without integrity as he tried to cover his tracks. 

“He has spent many years trying to evade responsibility for his actions. The Tribunal’s full endorsement of our findings now brings those efforts to avoid accountability to an end. We will pursue recovery of the penalty to the fullest possible extent and will not hesitate to bankrupt him if necessary. We will ensure that he does not retain a single penny of his corrupt profits.”

The Tribunal noted that “Mr Reynolds is clearly guilty of dreadful misconduct over a protracted period, which had very serious adverse impacts on a large number of retail customers. He is, as the Authority alleged, a corrupt and dishonest man lacking integrity."