Anthony and Penny Davison have now been ordered to pay back the £2.4m ($3.1m, €2.8m) of people’s money they lost.
According to the complaint that has been upheld by the ombudsman, the trustees had misrepresented the pension scheme, mismanaged the funds, issued fabricated benefit statements and, as a result, lost the funds members had put in.
The Henry Davison scheme was set up in 2008 as a money purchase occupational pension arrangement.
Lack of expertise
In 2012, the pension scheme entered an asset management agreement (AMA) with investment management firm Tivan.
However, the Davisons admitted they did not seek independent advice beforehand because Anthony Davison believed he understood the agreement’s terms.
Tivan started managing over £1.3m of pension funds, of which it lost over £1.2m. The firm then went into liquidation in 2016.
The scheme also invested £798,061 in loans and £173,461 in Kirkpatrick Fiscal stocks, a company owned by Davison as well.
A further £114,803 of members’ funds went to another company created by Anthony Davison, called Henry Davison Associates.
Subsequently, the Pension Ombudsman decided that, within 28 days, the scheme needs to repay:
- £1,328,963 that the trustees transferred into the Prime Brokers’ accounts in respect of the AMA with Tivan, less any funds that were returned to the scheme when the accounts were closed;
- £798,061 that were paid out by the trustees as loans;
- £173,461 being the amount invested in Kirkpatrick Fiscal; and
- £114,803 being the total amount of all payments made by the trustees to Henry Davison Associates.
In addition, the scheme also needs to pay an 8% interest rate of the judgement amount, as well as £5,000 to each of the 14 claimants as compensation.