View more on these topics

Connaught investors still waiting for compensation

FCA logo glass 2 620x430Investors who lost money after the Connaught Income Fund collapse are still waiting for compensation, as FCA work to “arrange the distributions” of payments continues.

The regulator says a previous statement – made to the Complaints Commissioner – referred to the fact the process of calculating redress had begun, rather than payments being made.

The FCA ruled in November that Capita Financial Managers Limited, the fund’s authorised corporate director, should pay affected investors compensation worth up to £66m by 31 March.

Agents Duff and Phelps, who were the liquidators of Connaught’s income Funds, are currently calculating individual payments.

Investors should get their capital refunded, with interest, calculated at a simple rate of 0.52 per cent. Any income received, distributions or dividends paid by the liquidator, or compensation payments will be deducted from the final settlement.

A number of complaints have been made about the FCA’s handling of the collapse of these funds. These have not been upheld by the Complaints Commissioner, although it has said a third party review will take place after the FCA has closed its investigations.

In 2015 the FCA started an investigation into CFM after the Connaught Income Series 1 fund – which invested in high risk loans – lost £110m after the fund was suspended in 2012.

Connaught entered administration in September 2012 after the failure of its Income Series 1,2 and 3 fund.

In November the FCA released a critical report on CFM saying it did not conduct adequate due diligence on the fund and failed to communicates its processes properly to investors.

The FCA would normally charge a penalty for the failing but decided to only issue a public censure in relation of the firm, as it would not have been able to pay this on top of the £66m compensation.

A financial adviser – who asked not to be named – says he hopes there would be no further delay, and payments made promptly to investors by the end of March.

Recommended

Parliament-Fog-UK-London-2012-700x450.jpg
1

Adviser trade body resurrects MP review of Connaught collapse

Adviser trade body Libertatem is resurrecting a cross-party group of MPs to re-examine the failure of the Connaught fund. The Connaught Income Series 1 fund entered liquidation in 2012, with investors facing loses of up to 50 per cent as interest payments were withheld. A formal All Party Parliamentary Group was run to review the Connaught […]

1

Capita prepares for FCA fine over Connaught role

The regulator has said it “is minded to seek a financial penalty” against Capita Financial Management Capita has set aside £37m after the FCA indicated it could fine the company over its connection to the collapsed Connaught Income Series 1 fund. Capita Financial Managers was the operator of the fund until 2009. The fund went […]

FCA names chief operating officer as Brexit head

The FCA has appointed its chief operating officer Nausicaa Delfas to the new role of executive director of international, where she will be leading the FCA’s response to the Brexit process. In addition to overseeing the operation of withdrawal from the EU, Delfas will be responsible for developing the FCA’s international engagement strategies, and overseeing […]

William Littlewood “betting that QE won’t work”

Journalist Alexis Xydias interviews Artemis manager William Littlewood about his views on bond, equity and currency markets and the impact of a Greek exit from the EU. With bond yields at “ludicrous” levels, William believes a tipping point for bond markets is sure to come. As a result, his Strategic Assets Fund holds government bond shorts to the tune of 100 per […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Agents Duff and Phelps says it all

  2. Another motorway pile-up that the FSA (on Hector Sants’ watch) failed to see coming and take steps to avert.

Leave a comment