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Capita faces FCA inquiry over Connaught

The Financial Conduct Authority is looking at whether Capita should have to make good investors losses following claims the outsourcing group failed to flag concerns about the Connaught Income fund.

The Times reports that investors, who invested £118m through the collapsed Connaught Income Series 1 fund, are pushing the regulator to investigate whether Capita should take any responsibility for the collapse of the Ucis fund.

The firm was responsible for administering the fund between its launch in March 2008 and September 2009, when it was replaced by fund operator Bluegate.

The FCA told The Times it is “assigning significant resources” to investigating the role of Capita, saying the matter is “high on our agenda.”

Capita told the newspaper that despite concerns it had about the fund, it felt these had been dealt with in an appropriate way before the account was resigned in 2009.

A spokeswoman for Capita said: “The fact the fund continued to run for almost three years suggests the factors leading to the fund’s suspension and winding-up arose after CFM’s involvement had ceased.”

The fund invested in bridging loans to homemovers and was marketed as low risk. It was suspended in March 2012 with investors facing losses of around £100m.

Former Tiuta chief executive George Patellis – whose firm made more than £100m of bridging loans on behalf of Connaught – told the Daily Mail there was “a lot of evidence” that Capita had concerns regarding the fund.

Capita is also facing around £25m in claims from investors in the collapsed Arch cru fund range, which it also administered.

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  1. Capita is beginning to look about as safe a pair of hands as a Scottish goalkeeper!

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