The administrator in charge of Eurolife has been accused of sending out misleading information to the firm’s creditors.
In a statement dated October 16, FA Simmons and Partners said Eurolife arm Eurolife Capital Funding, which principally acted as dealers and brokers in financial futures, was regulated by the FSA.
ECF was not regulated but brokers question why it was not if its main business was dealing in complex financial instruments. The FSA says ECF’s activities fell outside its jurisdiction as the secured bonds issued in 1999 were raising money for other companies within the Eurolife group, parts of which were regulated.
Baronworth director Colin Jackson says the administrator’s statement was misleading because investors might think they are due compensation under the Financial Services Compensation Scheme if ECF was regulated.
He says: “It does not help anybody if the FSA says some parts of the group were regulated and some parts did not need to be regulated. We have to address our mind to Eurolife Capital Funding. The question is, did Eurolife Capital Funding carry out its business as a dealer and broker in financial futures? If it did, should it have been regulated? If not, why not?”