Equity for Growth (Securities) Limited ordered to halt regulated activities
The Financial Conduct Authority has ordered Equity for Growth (Securities) Limited to immediately cease all regulated activities and restrict asset disposal. This action follows the firm's failure to meet appropriate resource conditions due to significant liabilities from Financial Ombudsman Service compensation awards.
Immediate operational halt and asset freeze
The Financial Conduct Authority (FCA) has confirmed its decision not to rescind requirements previously imposed on Equity for Growth (Securities) Limited.
This Second Supervisory Notice, dated January 24, 2025, follows multiple representations from the firm.
The requirements, effective immediately, mandate the firm to cease all regulated activities for which it has Part 4A permission, unless expressly consented by the Authority.
The firm must also notify all customers of these requirements, secure and preserve all books and records, including client lists and financial data, and retain them in the UK.
A critical requirement prohibits the firm from disposing of, transferring, or diminishing the value of any of its own assets or client funds without prior written consent from the FCA.
Limited exceptions apply for payments such as FOS awards, approved contractual obligations, legal advisors, and pre-agreed salary payments.
Liabilities from mini-bond promotions
The FCA's action is based on Equity for Growth's failure to satisfy the 'Appropriate Resources Threshold Condition,' as the firm appears unable to pay its debts.
Significant contingent liabilities from potential Financial Ombudsman Service (FOS) compensation awards are likely to exceed the firm's insurance and assets, posing a direct risk to consumers.
Equity for Growth, authorized in 2008, operated with appointed representatives (ARs) who promoted non-readily realisable 'mini-bonds' from unlisted companies that subsequently failed.
As the principal, Equity for Growth is liable for the actions of its ARs, including FOS awards.
The firm has a history of significant supervisory engagement, including withdrawing financial promotion approvals in 2019 and an ongoing investigation since April 2019.