Release Date: 18th October 2013
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has taken severe disciplinary action against two Surrey-based financial advisers, Mark Bentley-Leek and Mustafa Dervish, fining them a total of £885,000 and banning them from any roles within financial firms. Their company, Bentley Leek Financial Management, has also had its permissions cancelled by the FCA and is now in liquidation.
From March 2004 to November 2010, Bentley-Leek and Dervish advised over 300 customers to invest more than £35 million in various property developments in the UK and abroad. Despite the inherent risks associated with these investments, the advisers misrepresented the safety of these ventures, falsely assuring some clients of guaranteed returns ranging from 6% to 18%, and in some cases, even up to 50%.
A significant breach of ethical conduct was their failure to disclose their own financial interests as directors and owners of the property development companies they were recommending for investment. This undisclosed conflict of interest compromised the impartiality of their advice.
By mid-2009, the advisers were aware that the property companies were struggling due to a deteriorating market and tightening bank lending. Nevertheless, they continued to encourage investments into these ventures. By November 2011, Bentley Leek Financial Management had gone into administration and subsequently became insolvent.
The majority of investors, many of whom invested in life savings or pension funds, are expected to suffer considerable losses. The Financial Services Compensation Scheme (FSCS) is evaluating potential compensation for those affected.
Tracey McDermott, the FCA’s director of enforcement and financial crime, criticised the advisers for their lack of honesty and integrity, stating that their actions not only failed their customers but also further damaged the reputation of the financial services industry. She emphasised the FCA’s commitment to eliminating such deceptive practices and maintaining consumer trust in the financial system.
Bentley-Leek was fined £525,000, and Dervish was fined £360,000. These fines were reduced from potential penalties of £750,000 and £450,000 respectively, due to early settlement in the FCA’s investigation process.
This case highlights the critical importance for financial advisers to maintain transparency, avoid conflicts of interest, and act with integrity. It also serves as a reminder of the FCA’s strict regulatory framework aimed at protecting consumers and enhancing the integrity of the UK’s financial systems. Affected individuals are urged to contact the FSCS to explore options for compensation.
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