08925-16 Alexandra Associates (UK), Lee Lummis and Craig Lummis v The Sun

    • Date complaint received

      6th April 2017

    • Outcome

      No breach - after investigation

    • Code provisions

      1 Accuracy, 2 Privacy, 3 Harassment

Decision of the Complaints Committee 08925-16 Alexandra Associates (UK), Lee Lummis and Craig Lummis v The Sun

Summary of complaint

1. Alexandra Associates (UK) Ltd, Lee Lummis and Craig Lummis complained to the Independent Press Standards Organisation that The Sun breached Clause 1 (Accuracy), Clause 2 (Privacy) and Clause 3 (Harassment) of the Editors’ Code of Practice in relation to articles headlined “Beware of ‘Green’ investment doesn’t grow on trees”, published on 26 March 2016, and a column published on 18 April 2016. The 26 March article was published online with the headline “Victims share their anger at losing life savings in ‘Green’ investment scams”.  The 18 April column was published online on 20 April.

2. The 26 March article reported that an investment scheme, called Ethical Forestry, had been liquidated, with the “pension pots and savings of small investors wiped out”. The article reported that a named individual had been “cold-called by a firm called Avacade Future Solutions”, which “offered him a ‘pension review’ over the phone then directed him to a company called Liberty Sipp”. It reported that this firm then “told” the named individual to put his pension into Ethical Forestry. The article reported that the named individual had said that “I read in The Sun that Ethical Forestry had gone into liquidation and I rang up Avacade. They still insisted my investment was safe. It sounded like the advisor was reading from a transcript”.

3. The 18 April column contained photographs of the complainants, which were referred to as “the first photos of Craig and Lee Lummis”.  It reported that they were the “father and son team who pocketed a fortune by encouraging pensioners to cash in their pots and invest in Ethical Forestry”.  The article claimed “They’re at it again”, and explained that “this time the Lummis family are flogging Brazilian property”. The article stated: “Don’t touch it with a bargepole”, and reported that “these charlatans are unregulated by Financial Conduct Authority”. It reported that “the Lummis mob live somewhere in the Manchester area but may have moved lately – probably to a mansion with their 30 percent of all the money they raised for those crooks at Ethical Forestry”. It stated: “if you have any idea where they are please email me”, and provided the columnist’s email address.

4. The complainants now trade as Avacade Future Solutions, which they said is a separate entity with a distinct business model to Avacade Ltd, which is in liquidation. They said that the allegations in the article under complaint related to Avacade Ltd, their previous company, not Avacade Future Solutions. The complainants said that it was therefore misleading for the articles to refer to simply to “Avacade”, or “Avacade Future Solutions”, where this company had no dealings with the Ethical Forestry, and is a separate business.

5. The complainants denied that investors in Ethical Forestry had lost their investments. The company in question was in liquidation, but the complainants provided correspondence from the liquidator to investors, which stated that “currently, you have not suffered any loss. Your loss, if any, will only be established in the fullness of time”.

6. The complainants said that Avacade Ltd had not advised people on how they should invest their pensions, or offered “pension reviews”. They said that one of the options set out in the non-advised pension reports they prepared was to transfer a pension into a Self-Invested Personal Pension (SIPP). It said that these reports confirmed that Avacade was not regulated. If a client showed an interest in doing so, Avacade Ltd would suggest a SIPP administrator, and would show them brochures of investments, one of which was Ethical Forestry. The complainants said it was not reasonable to suggest that Avacade Ltd “sold” this investment.

7. The complainant said that they go to lengths to make clear that they are not regulated, and that they have not undertaken regulated activities. The complainants said that the articles used language which suggested they undertook regulated activities, such as advising on pensions, which is a serious allegation when they were not regulated.  The complainant said that the references to them in the 18 April column as “charlatans”, who were part of a “mob” imputed that their actions were criminal, without basis. The complainant said that the use of “mug shots” in this article, referred to as the “first photos” of them, also implied that they were criminals on the run.

8. The complainants denied that Avacade Ltd “raised money” for Ethical Forestry, or that they received 30 percent of this money. The complainants said that when a client invested in Ethical Forestry, they received a commission payment. They said that the percentage was commercially sensitive, but that it was significantly lower than the 30 percent reported. The complainants denied that they ‘cold-called’ prospective clients. They said that Avacade Ltd contacted people who had shown an interest in a free pension review, whether by filling in online surveys, or otherwise.

9. The complainants said it was inaccurate to claim that they were “flogging Brazilian property”. They said that they were not “selling” Brazilian property, but were introducing their clients to an opportunity to finance infrastructure in that country. The complainants said that the word “flogging” carried with it negative connotations of poor conduct by the seller, and a poor quality product.

10. The complainants said that the newspaper’s request to its readers to provide information about their location represented a ‘witch-hunt’, which harassed them, and intruded on their privacy. On 18 April, they said they were “door-stepped” and photographed by journalists working for the newspaper, which they found distressing and intrusive. They said that Lee Lummis had a reasonable expectation of privacy when he was photographed on his doorstep, without his consent, by a photographer using a long lens, remaining in a car parked on the street. They said that Craig Lummis spoke to the reporter on his intercom, but that photographs were taken of his house, in circumstances where he had a reasonable expectation of privacy.

11. The newspaper said that Avacade Ltd played a significant role in leading private individuals to transfer their pensions out of ‘suitable’ investments, and into unsuitable investments, such as Ethical Forestry. It said that it had been contacted by investors, who described a similar process leading to their investment in Ethical Forestry. Possibly as a result of filling out an online pension questionnaire, an individual was “cold called” by Avacade Ltd. They would be offered a “pension review” by a representative of Avacade Ltd, who described themselves as “sales representatives”, or “investment specialists”. Avacade Ltd would then send a pension report to these customers, which showed the return on their current pension, and included a document showing substantial predicted returns, should this customer choose to invest in Ethical Forestry. Should the customer authorise the transfer of their pension into Ethical Forestry, Avacade Ltd would write to them to congratulate them. The newspaper provided an example of such a letter, which stated “On behalf of all of us at Avacade Ltd, we would like to thank you for choosing to invest in one of our investment products”. The newspaper noted that Avacade Ltd received commission from Ethical Forestry for every individual who invested.  

12. The newspaper said that Ethical Forestry was now in liquidation, and that given the apparent breach of financial regulation in raising money for the scheme, a fair assessment was that investors face serious, if not complete, financial loss. In this regard, it noted that in the brochure for the scheme, as shown to potential investors by Avacade Ltd, it was suggested that investors could realise their investment at any time by cutting down and selling their trees, or by selling their investment on. The newspaper said that neither of these options was possible, as things stood.

13. The newspaper said that the complainants had acted immorally by approaching inexperienced investors, and promoting unregulated investments, with the result that many transferred significant portions of limited pension savings into Ethical Forestry. It also said that there were grounds for suspecting that the complainants may have engaged in regulated activity, by either making arrangements for clients to sell their investments, or by inviting or inducing clients to invest in Ethical Forestry. It said that Avacade Ltd was unregulated, and that its promotion of Ethical Forestry may be in breach of financial services legislation.

14. The newspaper said that there was a strong likelihood that Ethical Forestry would be regarded as an “Unregulated Collective Investment Scheme” (UCIS) under financial services legislation. It said that by its nature, UCIS are high risk, and not suitable investments for the general public. It noted that since publication of the article, the Financial Conduct Authority began investigating Ethical Forestry for being a UCIS.

15. The newspaper accepted that the complainants had liquidated Avacade Ltd, and now traded as Avacade Future Solutions. However, it said that for all intents and purposes, these two companies ran the same businesses for the complainants, trading under the same “Avacade” brand. It said that Avacade Future Solutions continued to send reports on investments to the individuals Avacade Ltd had persuaded to invest in Ethical Forestry. It said that Avacade Future Solutions had taken over responsibility for Avacade Ltd’s customers and business. It noted that the complainants were the directors and shared owners of both companies.

16. The newspaper said that the word “flog”, in relation to the Brazilian property, simply meant to sell, or offer to sell, and carried no negative connotation. It provided an email from Avacade Future Solutions to an “Avacade client”, offering them “advance access” to an investment opportunity in Brazil.

17. The newspaper said that on 24 March, it sent an email to the address provided on the complainants’ website, asking a series of questions about the complainants’ role in contacting investors in Ethical Forestry. It said it received no response to this email. It said that after publication of the March article, it noted that the complainants’ website had been taken down, and that its telephone number no longer worked. It said that there was a clear public interest in putting the subject matter of the articles to the complainants, and denied that its efforts to locate the complainants, or to obtain their comments, including a single visit to each of the complainants’ homes, represented harassment.

18. The newspaper said that it took a number of photographs of Lee Lummis as he left his home, although these were not published. It said that Craig Lummis’ house was photographed from a public road. It said that in these circumstances, neither complainant had a reasonable expectation of privacy. In any event, it said that there was a public interest in taking the photographs, holding the complainants to account for the allegations contained in the articles. It said that the photographs of Lee Lummis showed the kind of expensive house and car he was able to enjoy. The newspaper noted that the image of Craig Lummis’ home on Google Maps contained more detail than the photograph taken by its journalist.

19. The complainants said that Ethical Forestry was not deemed to be a UCIS, and provided a letter dated 2008 from the FSA to the operators of the scheme, which showed that the scheme was not considered to be a UCIS at that time. The complainants said that there differences of substance between Avacade Future Solutions and Avacade Ltd, which operated under different business models. They said that between 2010 and 2014, a third individual owned a share of Avacade Ltd, and that the ownership structures were therefore different.

Relevant Code provisions

20. Clause 1 (Accuracy)

i) The Press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.

ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and — where appropriate — an apology published. In cases involving IPSO, due prominence should be as required by the regulator.

iii) A fair opportunity to reply to significant inaccuracies should be given, when reasonably called for.

iv) The Press, while free to editorialise and campaign, must distinguish clearly between comment, conjecture and fact.

Clause 2 (Privacy)*

i) Everyone is entitled to respect for his or her private and family life, home, health and correspondence, including digital communications.

ii) Editors will be expected to justify intrusions into any individual's private life without consent. Account will be taken of the complainant's own public disclosures of information.

iii) It is unacceptable to photograph individuals, without their consent, in public or private places where there is a reasonable expectation of privacy.

Clause 3 (Harassment)*

i) Journalists must not engage in intimidation, harassment or persistent pursuit.

ii) They must not persist in questioning, telephoning, pursuing or photographing individuals once asked to desist; nor remain on property when asked to leave and must not follow them. If requested, they must identify themselves and whom they represent.

iii)  Editors must ensure these principles are observed by those working for them and take care not to use non-compliant material from other sources.

The Public Interest

There may be exceptions to the clauses marked * where they can be demonstrated to be in the public interest.

The public interest includes, but is not confined to:

-Detecting or exposing crime, or the threat of crime, or serious impropriety.

-Protecting public health or safety.

-Protecting the public from being misled by an action or statement of an individual or organisation.

-Disclosing a person or organisation’s failure or likely failure to comply with any obligation to which they are subject.

-Disclosing a miscarriage of justice.

-Raising or contributing to a matter of public debate, including serious cases of impropriety, unethical conduct or incompetence concerning the public.

-Disclosing concealment, or likely concealment, of any of the above.

-There is a public interest in freedom of expression itself.

-The regulator will consider the extent to which material is already in the public domain or will or will become so.

-Editors invoking the public interest will need to demonstrate that they reasonably believed publication - or journalistic activity taken with a view to publication – would both serve, and be proportionate to, the public interest and explain how they reached that decision at the time.

-An exceptional public interest would need to be demonstrated to over-ride the normally paramount interests of children under 16.

Findings of the Committee

21. The Committee noted the complainants’ position that the article implied they had carried out regulated activity, when unregulated. The article of 26 March reported that through their company Avacade Ltd, they had provided an individual with a “pension review”, that they had “directed” this individual towards a SIPP, and that this individual was then told to put his pension into Ethical Forestry. The criticism the article directed at the complainants was that this individual had lost the investment he had made through their firm. The article referred to the “unregulated ‘ethical’ investments market”, and stated that “there is nothing illegal about what the firms or financial advisors are doing”. The criticism the articles made of the complainants did not rest on an allegation that the complainants had carried out regulated activity while unregulated. The articles were not misleading in the manner alleged.

22. It was not in dispute that through their company Avacade Ltd, the complainants had introduced clients to Ethical Forestry. As part of this introduction, they would compare the projected returns of individuals’ current pension arrangements, with the projected returns of Ethical Forestry. It was not in dispute that where those clients went on to make the investment, Avacade Ltd would receive a commission. In these circumstances, it was not significantly misleading for the 26 March article to report that the complainants had offered the individual concerned a “pension review”, that it advised him how to invest his pension, that it directed him to a SIPP, or that it “told” him to put his pension in to Ethical Forestry. It was not significantly misleading for the 18 April column to refer to the complainants as having “encouraged” pensioners to “cash in their pots and invest in Ethical Forestry”, or to refer to the complainants as having “raised” money for Ethical Forestry. In the context of the article, no significance attached to whether the complainants received a 30 percent commission for its clients’ investments in Ethical Forestry, or a lower percentage, and this statement was not significantly misleading.

23. The Committee noted the complainants’ position that Avacade Ltd did not “cold call” potential investors. However, the complainants accepted that Avacade Ltd contacted people who had shown an interest in a free pension review by filling in surveys online or otherwise. Where Avacade Ltd had contacted people who had not contacted them directly to seek their services, it was not significantly misleading to report that the individual featured in the 26 March article had been “cold-called”. The complainants accepted that they had introduced their clients to an investment in infrastructure in Brazil, and the Committee noted that the email containing this introduction offered Avacade clients “advance access” to this investment opportunity. In these circumstances, it was not significantly misleading to report that the complainants were “flogging Brazilian property”.

24. The Committee noted that the 26 March article referred to Avacade Future Solutions, when in fact, the company who had originally offered the pension review to the individual concerned was “Avacade Ltd”, which had since been liquidated. The Committee recognised that the companies were legally distinct, and noted the complainants’ position that they operated distinct business models. However, they were both companies owned and operated by the complainants, operating under the same “Avacade” brand. In addition, the Committee noted that the complainants did not dispute that Avacade Future Solutions had taken over responsibility for Avacade Ltd customers. In the circumstances, the Committee did not consider that the 26 March article’s reference to Avacade Future Solutions was significantly inaccurate.

25. It was not in dispute that Ethical Forestry had entered liquidation, and it was therefore not misleading for the 18 April column to refer to the scheme as having “gone bust”. The Committee acknowledged that the liquidators had written to investors to confirm that “your loss, if any, will only be established in the fullness of time”. Nevertheless, Ethical Forestry was in liquidation. Investors were unable to realise their investments, and the remaining value of the investments was unclear. It was not significantly misleading to claim that the investors in the scheme had lost their investments.

26. The 18 April column’s reference to the complainants as the “Lummis mob”, and as “charlatans” were clearly presented as the views of the columnist, based on his position that they had encouraged pensioners to invest in a scheme which was unsuitable, and had left them “out of pocket”. The reference to the images of the complainants being the “first photos” of the complainants, or the columnist’s request for information about their location, did not suggest that they had engaged in criminal conduct in the context of the article. The article was not misleading in the manner alleged.

27. The Committee did not establish that the articles contained significant inaccuracies or misleading statements, such as to require correction under the terms of Clause 1 (ii). The newspaper had relied on the accounts provided by individuals introduced to Ethical Forestry by the complainants. It had written to the complainants in advance of publication to obtain their comments, but had not received a response. In these circumstances, there was no failure to take care not to publish inaccurate information, and no breach of Clause 1 (i). The complaint under Clause 1 was not upheld.

28. When Lee Lummis was photographed by the newspaper, he was stood in his open doorway and outside his house, apparently in plain view of the street, and in the process of leaving his home. In these circumstances, the Committee did not consider that the complainant had a reasonable expectation of privacy, such that consent for his photograph was required under the Code. The taking of these photographs did not raise a breach of Clause 2. The taking of photographs of Craig Lummis’ house, from a public road, did not represent an intrusion into his privacy. This aspect of the complaint did not raise a breach of Clause 2.

29. The Committee acknowledged the complainants’ concern that the columnist had made a public request for information about their location. However, for the newspaper to make efforts to ascertain their location, as part of its continued investigation, did not in itself represent intimidation. While the Committee recognised that the columnist had made a very public request for this information, the Committee did not consider that this represented harassment under the terms of Clause 3. There was no suggestion that the newspaper had persistently approached the complainants at their houses, or had done so following a request to desist. The Committee did not consider that approaching the complainants at their house, or the taking of the photographs represented harassment. There was no breach of Clause 3.


30. The complaint was not upheld.

Remedial Action Required

31. N/A

Date complaint received: 05/10/2016
Date decision issued: 19/03/2017