The FCA has confirmed its indefinite ban on Demetrios Hadjigeorgiou, CEO of SIPP and pension-linked discretionary fund manager SVS Securities.
He has been banned indefinitely from working in senior management positions in financial services and also fined £56,400 by the watchdog.
Mr Hadjigeorgiou was a former director and CEO of London-based SVS Securities Plc (SVS), a discretionary fund manager involved in bonds, SIPPs, securities and other investments, many linked to pensions.
He was originally fined in April 2024 but appealed the fine to the Upper Tribunal. The ban and fine were imposed after Mr Hadjigeorgiou settled his case with the FCA and withdrew his referral to the Upper Tribunal.
The FCA said he and some colleagues had ‘mistreated’ the pension funds they were responsible for.
Some 879 customers paid in a total of £69.1m to SVS but the bonds they invested in, some added to an SVS SIPP, have since defaulted, with customers unlikely to receive more than a fraction of their investment back, the FCA said in a statement.
Commission of up to 12% was paid to introducers selling the bonds.
The watchdog found that Mr Hadjigeorgiou (FCA Ref No. DCH01144) failed to properly manage SVS and protect its customers’ interests, including investments in the SVS SIPP.
The FCA said: “While he was CEO, the firm invested customers’ money, including pension savings, in high-risk products while receiving significant payments from the companies that issued them. Mr Hadjigeorgiou also failed to challenge a decision that reduced the value of customers’ bond investments by 10% when they decided to sell them.
“This generated £359,800 for SVS at the expense of its customers. Customers were not clearly told about this reduction and, as a result, some lost part of their pension savings."
The FCA found that Mr Hadjigeorgiou breached Statement of Principle 6 by failing to exercise due skill, care and diligence in managing the business of SVS.
Therese Chambers, joint executive director of enforcement and market oversight, said: “Building up a pension for retirement is one of the most important investments you can make. Mr Hadjigeorgiou put people's savings at risk and his actions have left people worse off in retirement. Where senior leaders fail to put customer interests first, we will act.”
In 2024, the FCA decided to ban and fine 3 individuals, including Mr Hadjigeorgiou, who were involved in running SVS Securities Plc (SVS). The three were head of compliance David Stephen, CEO Mr Hadjigeorgiou and Kulvir Virk, a former CEO and majority shareholder. Mr Stephen and Mr Hadjigeorgiou referred their fines and bans to the Upper Tribunal. Kulvir Kirk decided not to refer his Final Notice to the Upper Tribunal. The FCA has banned Mr Virk from working in financial services
The FCA said in its notice at the time that Mr Virk, “recklessly caused SVS to use a complex business model intended to maximise the flow of customer funds into high-risk illiquid bonds.”
The bonds involved inducements to SVS and unauthorised introducers, with undisclosed commissions of up to 12% of customers’ investments.
The Financial Services Compensation Scheme listed the firm as failed in 2019 as it was unable to meet all claims against it. The FSCS said it has now completed its investigation into the SVS SIPP and added that the enquiries were specific to customers who transferred their pensions into the SVS SIPP administered by Gaudi Regulated Services Ltd, between October 2011 and October 2012.
The FSCS said it was able to consider claims against SVS concerning the underlying investments within the SIPP. Each claim will be assessed on an individual basis to determine whether it is eligible for compensation, the FSCS said.