Pressure mounts as financial advisory firm loses court battle

PRESSURE is continuing to mount on a firm of Yorkshire financial advisors which has lost its fight to overturn a High Court ruling ordering it to pay more than £2m to its former clients.

The decision comes following Mr and Mrs Mohun-Smith’s claim against York-based TBO as a result of negligent recommendations which were made to them in 2007 and 2009.

Although the couple had asked TBO to recommend cautious investments from which they could draw an income, TBO instead put in place numerous high risk investments which were not properly explained to them.

TBO Investments, which is owned in part by Godfrey Bloom, the former UKIP MEP and where he is understood still to own the majority of the shares, had a judgment entered against it in June for £2,135,676.  

An application by TBO Investments to appeal against the original ruling of the High Court and have a re-trial was rejected last week by Judge Seymour QC.

The judgment now remains and TBO Investments was also ordered to pay an additional sum of £10,000 for the costs incurred in the appeal process.

TBO director Scott Robinson failed to attend the first hearing due to what he described as family stress and there was no legal representation for the company in court.

Mr Mohun-Smith says: “I relied upon the financial advisor to put in place investments for us that would provide a reliable and comfortable standard of living for the rest of our lives. However, to my complete horror, it has become clear that nearly all our money was placed in unregulated collective investment schemes which have been suspended with an almost complete loss of capital.”

Meanwhile, another adverse decision by the Financial Ombudsman Service against the company has been made in recent weeks.

In a second case, on July 9, a further finding of negligent advice was made against TBO Investments and Mount Sterling Wealth by the Financial Ombudsman Service.

The claimant in this case, a Mrs Q from Leeds, (adopted by the Financial Ombudsman Service to ensure confidentiality) brought a claim for negligent recommendations made by both companies between 2007 and 2013 which resulted in an appreciable loss of capital and income in retirement.

An adjudicator for the Financial Ombudsman Service said that Mrs Q had been unfairly exposed to “more risk than she was willing to take or able to tolerate”. Both companies failed to respond to the decision in time and the matter automatically passed to the Ombudsman.

Following a review, the Ombudsman upheld the complaint stating that the advice provided was unsuitable and also criticised both companies for “unnecessarily prolonging the matter” and causing “Mrs Q a degree of distress and inconvenience”.

Jonathan Mortimer of Raworths Solicitors is now instructed by both claimants to take enforcement action to ensure the awards are paid.

He says: “We will be taking immediate steps to enforce the judgment which is likely to include a winding-up petition against TBO. Based upon the failure of the financial advisors to co-operate with the proceedings so far, it seems that only strong action will encourage them to face up to their obligations to Mr and Mrs Mohun-Smith and Mrs Q respectively.”

Mrs Mohun-Smith says: “What annoys me the most is that both TBO and the main director Scott Robinson failed to make any monetary offer to settle the case or even to agree to a mediation. Instead, they conducted their case aggressively right up to a few weeks before the trial and then did not even bother to attend.

“Scott Robinson sent a letter to the court stating that he was unable to attend due to family stress. The Judge had none of it and the matter proceeded quite correctly in their absence. The application for a re-trial was also completely without merit and was quite rightly thrown out.”