Lumiere Wealth Limited (in liquidation) (Lumiere) (2020-09-09)

Summary

This is a public statement issued by the Jersey Financial Services Commission (JFSC) under Article 25 of the Financial Services (Jersey) Law 1998, setting out the findings of an investigation into Lumiere Wealth Limited (in liquidation), a Jersey-registered investment business. It details breaches of the Code of Practice for Investment Business (IB Code) identified during an examination and subsequent investigation covering the period April 2015 to June 2016.

• Unsuitable advice: Lumiere failed to properly assess clients' risk appetite and capacity for loss, produced largely untailored Suitability Letters, and could not demonstrate that recommendations to invest in an affiliated Fund were suitable (breaches of Principles 2, 3 and 4).
• Inadequate product due diligence: Lumiere's assessment of the affiliated Fund relied on non-independent, copied and incomplete information and failed to consider evidence that client monies were being loaned within the corporate group (breach of Principle 2).
• False information to regulator: Lumiere failed to make required notifications to the JFSC and provided false and misleading information and documentation during the examination (breaches of Principles 1 and 6).
• Insurance failings: Lumiere omitted material facts on its professional indemnity insurance proposal form, contributing to its cover being voided (breaches of Principles 2 and 5).
• Conflicts of interest: Lumiere failed to identify or address conflicts of interest, including undisclosed use of the Fund administrator's bank account for client deposits and a matter presenting a financial crime risk to a client (breach of Principle 2).
• Complaint handling and remuneration: Lumiere's review of client complaints was inadequate and impartial, and it improperly received and inconsistently addressed remuneration from product providers (breaches of Principles 3 and 4).

The JFSC concludes the breaches were serious and material, and states it would have considered revoking Lumiere's registration had the firm not already entered liquidation in October 2016 following Board application to the Royal Court. The statement is issued against the registered person only, not against any individual director, and no further action or sanction is imposed by this document itself; it is a historical, informational public statement rather than a source of new ongoing obligations.

Applies to

registered persons conducting investment business under the Financial Services (Jersey) Law 1998, investment advisers