The Jersey Financial Services Commission (JFSC) has published the conclusions from its investigation into Lumiere Wealth.
The regulator found that the defunct Jersey-based financial services business, which went into liquidation in October 2016, committed a “serious catalogue of failures”, breaching the island’s legal and regulatory regime.
The failures included Lumiere not providing clients with suitable investment advice, not adequately assessing the suitability of a particular fund it recommended to clients, not having adequate insurance cover in place, and giving the JFSC false and misleading information.
The Jersey watchdog first began investigating Lumiere in June 2016 after an on-site visit identified a number of significant concerns about how the company was conducting business.
The investigation was put on hold from October 2016, while the criminal investigation and subsequent trial of the business’ managing director, Christopher Byrne, were concluded.
Cautious
Martin Moloney, JFSC director general, said: “The risk of fraudsters is constantly out there. I am very conscious that when they use a regulated business to defraud investors and deceive the regulator, by the time we catch them, investors’ money can be long gone.
“We need to be cautious; investors need to be cautious.
“As we would do after any case of this magnitude, our next step is to see if there is anything we could have done better.
“We are doing this as part of a wider update of all our processes for granting licences to businesses.”
Criminal charges
The JFSC assisted Jersey law enforcement agencies in the criminal case against Lumiere’s former managing director Byrne.
In November 2018, Byrne was sentenced to seven years in prison for charges related to selling fraudulent investments.
Byrne was found guilty of 18 counts relating to £3m ($3.91m, €3.3m) he funnelled into the collapsed Providence Investment Fund.
