The Financial Services Compensation Scheme will automatically compensate hundreds of clients of a collapsed discretionary fund manager, but other investors will have to wait another five months to get their money back.
London-based Beaufort Securities has been investigated by both the FCA and US authorities.
An indictment from the US Department of Justice alleges that Beaufort recommended clients invest in art as part of money laundering, as well as attempting to manipulate stock prices.
Beaufort was placed into insolvency at the beginning of March after a successful application from the FCA to freeze the firm’s assets.
In an update published on its website today, the FSCS says 2,700 clients with claims of less than £2,000 will be compensated in full without having to submit an application form.
The compensation should be returned next month.
However, the majority of money will be returned to other investors in September at the earliest.
A distribution plan is being made with the administrators “as a matter of urgency”, the FSCS says.
The lifeboat fund has also reminded clients that the limit on claims for negligent advice is capped at £50,000, separated from another £50,000 to compensate any shortfall in assets held by Beaufort.
The FSCS will issue another update next month.