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Alternate Insurance Services Limited, summary public statement - 4 January 2010

Public Statement -
Alternate Insurance Services Limited (in liquidation) (“Alternate”)
Financial Services (Jersey) Law 1998, as amended (the “Law”)
Jersey Financial Services Commission (the “Commission”)

The Commission has issued this public statement in accordance with Articles 25(b), 25(c) and 25(d) of the Law.

Alternate was a Jersey incorporated provider of insurance services and investment advice. Following extensive regulatory action against Alternate, beginning in 2005 and focussed on the recklessness of investment advice given by Alternate to a number of its clients, the Commission took the unprecedented step of petitioning the Royal Court of Jersey for a Restitution Order.

On 16 February 2007, the Royal Court awarded judgment in favour of the Commission in 27 out of 28 cases. The Court agreed with
the Commission’s submissions that vulnerable investors were recklessly misled by financial advisers employed by Alternate; principally Mr Robert Le Fustec and Mr Douglas Clark, and found that the investments into which they had been induced to put their money were wholly unsuitable for them. The judge ordered Alternate to make restitution payments totalling almost £1.6 million. Alternate was unable to make these payments and went into liquidation. The Commission revoked Alternate’s registration under the Law.
Both Mr Le Fustec and Mr Clark provided the Court with a written undertaking that they will not seek to act in any capacity that involves the giving of investment advice.

The key points from the Alternate case considered relevant to the investing public can be summarised as follows.

    • Investors should not uncritically accept financial advice. They should ensure that they obtain and carefully consider a detailed and thorough written document from their financial advisor which sets out why the investment is suitable for them. They should be prepared to seek a second opinion on the advice they receive.

    • Investors should not invest in products they do not understand.

    • In particular, investors need to understand the risks associated with different investments and the benefit of spreading risk by investing in different products. They should thoroughly research and assess the risks associated with a particular investment.

  • Any investment proposal that involves borrowing could also involve substantially greater risk, and investors should scrutinize such proposals with extra care.
  • If a financial adviser invites an investor to commit to an investment without ensuring that the person has read and understood the terms and conditions of the product, the investor should stop and would in most circumstances be wise to seek the advice of another independent financial adviser before committing to the investment.
The Alternate judgment can be found at the following website address:

A more technically detailed public statement issued in respect of Alternate can be viewed by clicking here.

Jersey Financial Services Commission
14 - 18 Castle Street
St. Helier

Contact: Barry Faudemer -

4 January 2010


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