Release Date: 18th October 2013
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has taken significant enforcement action against two Surrey-based investment advisers, Mark Bentley-Leek and Mustafa Dervish, fining them a total of £885,000 and imposing bans on them from holding any position within a financial firm. The pair, who were directors of Bentley Leek Financial Management, have been penalised for misleading clients and failing to act with integrity in their advisory roles.
From March 2004 to November 2010, Bentley-Leek and Dervish advised over 300 customers to invest more than £35 million in property developments both in the UK and internationally. They misrepresented these investments as low-risk with guaranteed returns between 6% and 18%, and in some instances, projected returns as high as 50%. However, they failed to disclose their own roles as directors and owners of the development companies involved, creating a severe conflict of interest.
By mid-2009, both advisers were aware of the financial difficulties facing the property companies, attributed to a declining market and restricted bank lending. Despite this knowledge, they continued to solicit investments. Within 17 months, Bentley Leek Financial Management was driven into administration and subsequently into insolvency by November 2011.
As a result of these misrepresentations, most investors are expected to face substantial losses. The FCA has also cancelled the permissions of Bentley Leek Financial Management, now in liquidation, further reflecting the severity of the misconduct.
Tracey McDermott, the FCA’s director of enforcement and financial crime, emphasised the fundamental expectation of honesty and integrity from financial advisers, noting that Bentley-Leek and Dervish not only failed their customers but also contributed further to damaging the reputation of the financial services industry.
The fines of £525,000 for Bentley-Leek and £360,000 for Dervish could have been higher, specifically £750,000 and £450,000 respectively, had they not agreed to settle early in the investigation. This decision underscores the FCA’s commitment to protecting consumers and maintaining the integrity of the UK’s financial systems. Those affected by the malpractices of Bentley Leek Financial Management are encouraged to contact the Financial Services Compensation Scheme (FSCS) for potential compensation.
This enforcement serves as a stern reminder to financial advisers about the critical importance of transparency, avoiding conflicts of interest, and adhering strictly to regulatory standards to uphold consumer trust and market integrity.
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