The Financial Conduct Authority (FCA) has banned former Vector Wealth chief executive Jeffrey Dawkins and fined him nearly £270,000 for dishonestly acting as a front for a disqualified director who used the firm to sell high-risk investments, leaving investors facing losses of around £4 million.

The regulator found that Dawkins sold Vector Wealth in 2019 to a director who had been disqualified from running companies for 12 years in August 2014. The buyer sought to exploit the firm’s FCA-authorised status to market mini-bonds, while Dawkins told the regulator he remained in charge despite the new chief executive effectively running the business.

The arrangement allowed the disqualified director to use the appearance of regulatory legitimacy to promote the investments. The FCA said investors were not adequately warned about the risks by the director and Kadir Kanizi, a former senior manager at Vector Wealth.

Investors committed an average of £105,000, with one putting in £1.1 million. Before receiving marketing materials, prospective investors were required to confirm they were high net worth or sophisticated investors, but the FCA said the promotions did not properly communicate the risks.

Therese Chambers, the FCA’s executive director of enforcement and market oversight, said: “Jeffrey Dawkins acted as a front man for a banned director, helping high-risk investments look safer than they were.”

The regulator has separately banned Kanizi from senior management roles for failing to ensure consumers received adequate risk warnings. Although the FCA calculated that he should have been fined £80,096, it reduced the penalty to £20,000 because payment would cause serious financial hardship. The regulator agreed not to enforce the fine if the same amount was made available to Vector Wealth’s liquidators for distribution to investors.

Dawkins has also been ordered to repay £57,298, plus interest bringing the total to £68,257, representing proceeds received from selling Vector Wealth and continuing to act as its director and approved person. The FCA said his penalty included an uplift for failing to co-operate with its investigation.

The regulator warned that mini-bonds and loan notes can result in investors losing their entire investment if the issuing company fails. It permanently banned the marketing of speculative illiquid securities, including mini-bonds and loan notes, to retail investors from 1 January 2021.

Chambers urged consumers to exercise caution, saying mini-bonds and similar investments were “very high risk”. The FCA advised anyone approached with offers promising large, fixed returns to check the firm using its Firm Checker and Warning List before investing.

---