A FINANCIAL adviser has denied defrauding four elderly customers and told a jury he was also the victim of an alleged investment scam.

Marc Payne told Exeter Crown Court he invested £50,000 of his own money into a drinks firm because he was assured it had a marketing contract to use the names of the MCC and Lords Cricket Ground.

He advised four clients to put money into the venture because the firm called SPS produced financial projections which claimed it had major contracts with supermarkets and a forecast turnover of £6-million.

Payne is a former investment adviser with the Portman Building Society. He denies breaking financial services regulations because he provided the four investors with letters which made it clear the money they put into SPS was a private arrangement which had nothing to do with the firm and was outside the ambit of the regulatory system.

SPS, which changed its name to CMS Drinks International, folded in 2012 and a group of seven investors from North, Mid and East Devon lost all their money.

It was launched in 2006 by brothers Mark and Lee Chapman to market a range of drinks and suncreams using the Lords Cricket Ground brand.

A jury at Exeter Crown Court has been told that it never paid the £150,000 initial royalties payment and was banned from using the name of Lords in 2009 when the MCC threatened legal action.

Mark Chapman has admitted misusing the company’s assets and the prosecution alleges the money was spent on paying his mortgage and buying a Range Rover Sport, a Porsche Boxster, and a Mini Cooper instead of being invested.

Chapman, aged 51, of Merton and Twyford in Berkshire, has admitted fraud.

His brother Lee, aged 49, of Merton, denies five counts of fraud and three of contravening regulations which control financial services.

Payne, aged 43, of Higher Hearson, Swimbridge, North Devon, denied one count of fraud and four of carrying on a regulated financial activity without authorisation.

The allegations against all three men relate to a period between January 2007 and August 2012.

The alleged victims and the amounts invested are Graham Knight, from Reading, £291,000; Gwendoline Snell, aged 85, of Westward Ho!, £17,721.80; Gertrude Hill, aged 92, £54,500; her daughter Victoria Ford, aged 70, both from Torrington, £40,000; Richard Biss, aged 91, of Stoodleigh, Tiverton, £29,919,83; Valerie Addicott, aged 83, of Exeter, £50,000; Elizabeth Gage, aged 84, of Woodbury, £50,000; and William Maynard, aged 83, of Witheridge, £50,000.

Payne told the jury he knew Lee Chapman because they had worked together at the Portman in the past and he had been impressed by what he was told about SPS.

He said both he and clients who invested were impressed by the cricket connection and he was taken in by a document which came from the company and outlined a bright future.

He said he invested £50,000 of his own money in return for a ten per cent share but believed the company was growing so fast that when he urged his clients to do so they only received a five per cent share for the same outlay.

He said he provided customers Richard Biss, Valerie Addicott, William Maynard and Elizabeth Gage with letters which identified the SPS investment as high risk which was not covered by the Financial Services Authority’s compensation scheme.

He said he also made it plain the deal had nothing to do with his position at St James Place and that he was acting in a purely private capacity.

He said: ‘When I spoke to them I thought it was all going to plan. I made it plain this was something I was doing off my own back and was not covered by the FSA.

‘I wanted to make it crystal clear to them that what they were investing in was nothing to do with St James’ Place and it was not a product approved by them.

‘It was something I had looked at personally and invested in personally and nothing to do with my position as a partner.

‘I would absolutely not have advised any investment if I knew they (SPS) had lost the Lords contract.’

Payne said he was taken in by literature sent to him by Mark Chapman which promised large profits and spoke of deals with companies including United Breweries, Netto, Tesco and Bookers.

The trial continues.