A former wealth management executive has been prohibited from holding senior positions and fined nearly £270,000 following his involvement in selling a company to a disqualified director intent on exploiting its regulatory authorisations to market high-risk investments.

Jeffrey Dawkins, the ex-chief executive of Vector Wealth, was sanctioned by the Financial Conduct Authority (FCA) for misleading the regulator by claiming to oversee the company’s operations while effectively acting as a figurehead for a banned individual. The FCA concluded that Dawkins’ actions falsely enhanced the perceived safety of mini-bonds sold by the disqualified director, exposing investors to substantial financial losses.

The disqualified director reportedly promoted the mini-bonds without adequately warning buyers about their risks. Investors, who committed on average £105,000 each to these products, are collectively expected to lose about £4 million following Vector Wealth’s collapse in 2022. Kadir Kanizi, a former senior manager at Vector Wealth who collaborated in promoting these bonds, was also banned from senior roles and fined £20,000 for failing to properly inform investors of the investment risks.

According to the FCA, Dawkins “misled the authority as to the true ownership and control” of Vector Wealth by maintaining a senior management title without performing any substantive duties, effectively serving as a regulatory front for the company’s backers. This arrangement allowed Vector Wealth’s authorised status to create a misleading “halo effect,” which gave investors unwarranted confidence in the unlisted mini-bond products. The FCA’s enforcement notice states that this false assurance contributed directly to investors’ significant losses.

Vector Wealth had been dormant for several years before its acquisition in 2019. Correspondence reviewed by the regulator included a letter from the disqualified director to Dawkins referencing a strategic purchase aimed at avoiding regulatory scrutiny. Despite Dawkins receiving a modest salary of £6,000 as chief executive while working just one hour per month, the firm used its regulated status and that of related entities prominently in its marketing of unregulated bonds.

The company appointed administrators in April 2022 shortly after notifying the FCA of a £1.9 million shortfall between investor obligations and available funds. Claims totaling nearly £4.4 million were submitted to the liquidators by 45 creditors, the majority of whom were bondholders, excluding amounts owed to HM Revenue & Customs.

Therese Chambers, executive director of enforcement and market oversight at the FCA, stated that Dawkins acted as a “front man for a banned director,” which aided the misrepresentation of high-risk investments as safer opportunities. She emphasized the need for caution in mini-bonds and similar products given their inherent risks and the significant losses suffered by many investors.

Kanizi was contacted for comment, while Dawkins was not immediately available to respond. The FCA has previously warned against investing in unregulated loan note firms amid a rising number of collapses in the mini-bond sector, which has seen investors lose hundreds of millions of pounds over recent years.