No action against BNY and HSBC on Arch cru but Capita still waits
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The FSA says no disciplinary action will be taken against BNY Mellon Trust & Depositary and HSBC Bank over Arch cru but it is yet to determine whether Capita Financial Managers should be held legally responsible for investors’ losses.
The regulator wrote to Regulatory Legal last week in response to the law firm’s request for further details of the £54m compensation package agreed in June by Capita, BNY Mellon and HSBC for eligible CF Arch cru investors.
In the FSA’s letter, seen by Money Marketing, FSA legal group solicitor Jon Gerty says: “I can confirm that the FSA has made no determination that CFM is legally responsible for any investor losses. I can also confirm that the FSA will not be taking any disciplinary action against either BNY Mellon or HSBC in relation to their role as depositories of the funds.”
Regulatory Legal plans to launch a judicial review of the compensation package on behalf of 2,700 investors. Pressure group Justice in Financial Services has already applied for a judicial review.
Alongside distributions already made and remaining assets, investors who accept the compensation package should get around 70 per cent of the net asset value of their funds when the range was suspended in March 2009.
Financial Ombudsman Service awards against Capita, BNY Mellon and HSBC have to be in line with payments on offer through the compensation package. Investors can still pursue their IFA for further compensation.
The FSA maintains that the £54m compensation package is a “good outcome” for investors and that redress does not necessarily entitle investors to a 100 per cent recovery of their losses.
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