FSCS pays out £2m for first 10% of A2O claims
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The Financial Services Compensation Scheme has paid out £1.9m to 39 claimants over defunct IFA network Alpha to Omega and is considering a further 376 claims.
The FSCS has rejected 18 claims on A2O so far.
This week, the FSA fined and banned former A2O compliance director Andrew Ruff £28,000 and former managing director Richard Lindley £14,000 for widespread compliance failings at the network.
The final notice against Lindley shows the regulator took into account that he did not “wilfully or deliberately disregard the compliance risk at A2O”. It says Lindley believed that Ruff was monitoring 100 per cent of high-risk business.
But the firm’s compliance records suggest the network only reviewed 41 per cent of cases identified as a Ucis sale between 2008 and 2009.
Philip J Milton & Company managing director Philip Milton says: “Will the FSCS look to pursue the directors for negligence to recoup some of the £1.9m in claims? I would hope it does this before turning to the industry with an extra levy.”
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Readers' comments (2)
MJ | 13 Jul 2011 1:27 pm
These two directors are responsible for £1.9m of compensation claims with only 10% of claims being dealt with so far. Why have they therefore been et off which such light fines (in proportion to the losses) and why are they both banned from ever working in the industry again.
If the levies that paid these fines came out of the pockets of FSA staff rather than IFAs I'm sure it would a be treated very differently.
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Anonymous | 13 Jul 2011 2:54 pm
£1.9 million divided by 38 cases paid out so far is the old maximum for FSCS payouts of £48k, which means these clients each invested consdierably MORE than £50k each.
Questions need to be asked about not just the directors, but of the advisers who sold these too.
What proportion of the investors total assets were these £50k + investments? Anything MORE than 10% of total investable assets and these advisers should never work again.
I feel sorry for the advisers NOT involved whose ability to work may be limited when they may well have done nothing wrong. A good reason to work for a smaller directly regulated firm with 5-10 max qualified advisers, where everyone has an ability to spot problems and be closeley involved in ensuring good advice is given and one's innocent ability to continue trading is not limited by the errors of someone you have never met who you thought the compliance team WERE monitoring.
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