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Capita faces 1,300 CF Arch Cru investor complaints

Complaint letters from over 1,300 investors in the CF Arch Cru fund range will this week be sent to Capita asking for the firm to refund their original investment plus interest.

This week’s Money Marketing reveals that the deluge of complaints has been organised in association with 128 IFA firms advising the 1,312 investors, and law firm Regulatory Legal.

The investors claim that, as authorised corporate director, Capita is responsible for the losses suffered.

The £363m fund range was suspended by Capita in March 2009 due to liquidity concerns caused by redemption requests. The value of the fund range dropped by £140m between March 13, 2009, when it was suspended, and September 30, 2009.

The complaints, which are all similar in nature, claim investors acquired the units on the back of inaccurate and misleading information and call for Capita to repay the original investment with interest. The investors also want Capita to take full ownership of the units.

If the complaints are not resolved satisfactorily within eight weeks, they will be sent to the Financial Ombudsman Service. Each complaint would cost Capita a £500 complaint fee, totalling over £600,000, unless it was decided the complaints were frivolous or vexatious.

Capita set aside a £30m provision for potential losses in March 2010 following the suspension of the fund range.

Regulatory Legal partner Gareth Fatchett says: “We can confirm that we have notified Capita’s lawyers of around 1,300 complaints to be issued against them. We expect this figure to rise to around 2,000 over the next month.”

A Capita spokeswoman says Regulatory Legal’s actions reflect an over-simplification and misunderstanding of the issues involved.

She says: “As investors are aware, we are undertaking a review to assess whether investors in the funds have suffered detriment beyond that caused by extreme economic conditions and to what extent the various parties involved should be responsible for any compensation.

“It is unclear why Regulatory Legal believes that it will assist its clients to try to pre-empt that process.”

For full story, see this week’s issue of Money Marketing.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Just a thought ~ has the FSA classified CF Arch Cru as a provider or as an intermediary (on the grounds that because the company had a couple of kids on a help line, that constitued the provision of advice)?

    Just so we know whether or not we need to brace ourselves for another special FSCS levy.

  2. I think the Capita spokeswoman has missed the point!!

  3. It’s all very simple really:

    Legal Statement
    Capita Financial Group is a trading name of Capita Financial Group Limited (“CFG”), registered in England Number 3669630, registered office Rochester Row, London, SW1P, its affiliates, subsidiaries and associated companies whose services are provided principally by the following corporate entities:

    United Kingdom

    Unit trust management ISA management and Authorised Corporate Director services are provided by Capita Financial Managers Limited (“CFM”) registered in England Number 1146888

    ISA management and associated services are also provided by Capita Financial Nominees Limited (“CFN”) registered in England Number 2823982.

    Complaints concerning the operation of any funds offered by CFM may be referred to the Complaints Department, Capita Financial Group, 2 The Boulevard, City West One Office Park, Gelderd Road, Leeds LS12 6NT. Once CFM has considered your complaint, you may have the right to refer the matter to the Financial Ombudsman Service at South Quay Plaza, 183 Marsh Wall, London E14 9SR.

    A copy of CFM’s Complaint Guide is available on request.

  4. It looks like a clumbsy attempt by Capita to dissuade investors from making a complaint, which constitutes a breach of FSA regulations. Surely Regulatory Legal will report this to the FSA.

  5. Big Business shouldnt be allowed to buy justice 4th August 2010 at 8:19 pm

    Capita should have been checking the unit price and information provided to them.

    They had a duty of care to ensure that the information they provided in relation to the price, performance was correct.,

    It is obvious that the assets brought by the fund managers Arch did not meet the fund mandate.

    Capita had a role as ACD to ensure the fund information provided is correct, do they need reminding that the Short annual reports they issued in June 2008 and December 2008, stated their were no liquidity issues, very little exposure to unlisted assets.

    Capita need to stand up and accept they have failed in their role as ACD and pay the compensation accordingly.

    Capita your number is up, so now its time to get counting the compensation, you have the funds so be responsible for once.

  6. Anonymous which reports are you referring to in 2008? Are you sure that capita stated that there were no liquidity issues? Could you post copies of the statements? I would be interested to know one way or another!!

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