Misleading investors — the Royal Court of Jersey delivers an important judgment
In Jersey Financial Services Commission v Alternate Insurance Services Limited & Others  JRC048, the Royal Court of Jersey (commissioner R Southwell QC and jurats Le Brocq and Georgelin) delivered a very significant judgment concerning certain of the provisions in the Financial Services (Jersey) Law 1998. The 150-page judgment clarifies the law concerning making misleading statements to investors and confirms that court has very wide powers to compensate investors. The court also made observations that raise the possibility of further regulation for financial services businesses.
The Jersey Financial Services Commission (JFSC) brought civil proceedings under Article 26 of the 1998 law on behalf of 28 investors against Alternate Insurance Services Ltd and against its sole shareholder and a director. The investors were financially unsophisticated individuals with limited means. Some were particularly vulnerable, such as a widow with three young children or a man with a family who had become unable to work due to a degenerative spinal condition.
Alternate was regulated by the JFSC and held a Class D licence, allowing it to advise on investments but not handle client assets. All the investors were advised by Alternate to buy a portfolio of traded endowment policies (TEPs) partly funded by their own savings and partly by a bank or building society loan. The transactions were known as traded endowment portfolio policies (TIPPs) and were arranged with third-party providers. The TIPPs involved ‘gearing’ — i.e. an increase of investment risk by borrowing money to purchase the investment. Generally, the investors did not understand the documents they were signing…
If you are registered and logged in to the site, click on the link below to read the rest of the Mourant Ozannes briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.