The European Court of Human Rights has dismissed a £70m claim from a group of EEA Life Settlements investors.
The EEA Life Settlements Action Group brought a claim against the FCA earlier this year, which was rejected by the regulator.
The EEA Life Settlements fund has been experiencing difficulties since December 2011 when the fund was first suspended after the FSA labelled life settlement funds as “high risk, toxic products”.
The group, which represents 557 investors, claims the regulator’s statements were factually incorrect and caused a run on the funds.
In May the group took its case to the European court, which responded this week to say it would not hear the case.
Group founder Peter Lihou says: “The court says the case did not meet its admissibility criteria, which was the first but highest hurdle as we know our case is strong if we can get it in front of a judge.
“The court did not give a specific reason but it may be because it believes the case is out of time or that we have not exhausted domestic remedies.”
The FCA is exempt from liability claims unless it can be shown to have acted in bad faith.
It argues that its intervention in the EEA Life Settlements market was justified.
Lihou says: “We are considering alternative options, such as petitioning to have the FCA’s legal exemptions removed as this is an unreasonable level of protection for a regulator.
“The regulator has not been exonerated because the court has not heard the case. I do not see this as a defeat and we will continue to fight until justice is served.”