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FCA takes action against three individuals from SVS Securities for mistreatment of pension funds

What has happened?

In June 2024, the FCA decided to ban and fine three individuals involved in running SVS Securities plc, a discretionary fund manager 

What are the key points of the FCA enforcement activity?

The FCA has decided to fine SVS Senior Managers. Kulvir Virk was fined £215,500, Demetrios Hadjigeorgiou £84,600 and David Stephen, £52,100. The FCA has banned Mr Virk from working in financial services and has decided to ban Mr Hadjigeorgiou and Mr Stephen from holding senior management roles.    

SVS managed investments held on behalf of its customers and as such the firm was required to act in the best interests of its customers and not to let conflicts of interests interfere with its obligations to them.   

Kulvir Virk, the firm’s former CEO and majority shareholder, recklessly caused SVS to use a complex business model intended to maximise the flow of customer funds into high-risk illiquid bonds operated by directors of SVS and a close business associate of his. The model involved inducements to SVS and unauthorised introducers with undisclosed commissions of up to 12% of the customers’ investments. The model created systematic conflicts of interests and inappropriately prioritised income to SVS over the best interests of customers.  

879 customers paid in a total of £69.1m. The bonds into which they were invested by SVS have since defaulted, with customers unlikely to receive more than a fraction of their investment back.   

In the FCA’s view, as Head of Compliance, David Stephen failed to fulfil his responsibilities to ensure that SVS was following the rules. Demetrios Hadjigeorgiou, SVS’s former finance director then CEO, also failed to fulfil his responsibilities to manage conflicts of interest and to ensure that proper due diligence was carried out.  
The FCA has found that the three individuals acted recklessly in deciding to mark down customers’ valuations when they disinvested from fixed income assets, with the result that SVS kept 10% of customer funds. This allowed them to generate £359,800 in income for SVS at the expense of its customers.   

How can we help you?

Thistle Initiatives has supported investment firms for over 10 years as a trusted compliance and regulatory adviser. In addition to assisting these firms as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.  

Are you looking for help with your conflicts of interest, Consumer Duty or Senior Managers arrangements, or more general regulatory questions? If so, we can help in any of the following ways; 

  • Advising on recording and managing conflicts of interest 
  • Controls to be applied to unauthorised introducers 
  • Implementing and maintaining your firm’s Consumer Duty framework 
  • Handling and reporting breaches of the FCA Consumer Duty Principle (Principle 12) 
  • Developing a Treating Customers Fairly framework 
  • Assessing the fit and proper status of your firm’s Senior Managers 

Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to