FSA probing Coutts over AIG fund sales
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The FSA has launched an investigation into Coutts & Co over the sale of the AIG enhanced fund.
Royal Bank of Scotland, which owns Coutts, revealed last week as part of its interim results for 2010 that the investigation surrounds the sale by Coutts & Co of the AIG premier access bond enhanced variable rate fund between 2001 and 2008 as well as its subsequent review of those sales.
State-owned RBS Group and its subsidiaries say they are co-operating fully with this investigation.
Last year, Sir Keith Mills launched a series of advertisements against Coutts’ AIG bond advice outside its head office in London.
In December 2007, Mills, the founder of the Air Miles and Nectar loyalty programmes, bought £65m of AIG Life’s premier bonds backed by its enhanced fund, which he says were recommended by Coutts as a low-risk, easy access investment and an alternative to bank and building society deposits.
The AIG enhanced fund was suspended on September 15, 2008 due to the size of redemptions after the US government was forced to step in to rescue the firm.
The fund was split in two with investors given half their money back in a lump sum while the other half was transferred to a protected recovery fund where investors are guaranteed the rest of their investment, as of the day the fund was suspended, as long as the capital is held for three years.
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