Investors 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.