The FCA is to hold talks in an attempt to reach a negotiated settlement of redress for those who invested in Connaught Income Funds.
In a statement today, the regulator says it believes a negotiated settlement to address investor losses represents the best course of action for all parties.
The FCA says: “Therefore, for a limited period, we will support the parties concerned in an attempt to reach a negotiated resolution with a view to obtaining appropriate redress for investors as soon as possible.
“We encourage the parties concerned to engage constructively with us and each other for this limited period to avoid potentially lengthy and costly alternatives to a negotiated settlement.
“This is a voluntary and confidential process, and so we will be unable to comment further on its progress until an agreement is reached or negotiations break down.”
The statement follows an appearance by FCA director of mortgages and consumer lending Linda Woodall at the All Party Parliamentary Group on Connaught Income Funds yesterday evening.
The Connaught Series 1 fund was suspended in March 2012 and interest payments were not made to investors. A review was commissioned to ascertain its true value.
In 2012, Money Marketing revealed investors faced losses of up to 50 per cent. An independent review by Duff and Phelps suggested recoveries would be between £46.5 and £53.2m of the £105.5m used to fund Tiuta.
A decision to wind down the Series 1 and £18m Series 2 fund, which was used to fund another Tiuta subsidiary called Tiuta Development Finance, was made in June 2012. A Series 3 fund, which was not linked to Tiuta loans and raised around £22m, was wound down in July 2012 due to a spike in redemptions.
CAM bought Tiuta International and Tiuta Development Finance, the Tiuta Plc subsidiaries that used the Series 1 and Series 2 funds respectively, for £1 in June 2012. In July 2012, Money Marketing revealed Tiuta International had been placed into administration by CAM.