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FSCS confirms 1,400 clients of collapsed DFM still awaiting refunds

Around 1,400 clients of collapsed discretionary fund manager Beaufort Securities are still waiting for their claims to be processed, Money Marketing understands.

The Financial Services Compensation Scheme confirmed it is still working on redress calculations for the cases.

Beaufort Securities became the target of both FBI investigations in the USA and FCA sanctions in the UK last year.

The FBI allege Beaufort “engaged in an elaborate multi-year scheme to defraud the investing public of millions of dollars through deceit and manipulative stock trading, and then worked to launder the fraudulent proceeds through off-shore bank accounts and the art world”.

The lifeboat fund says approximately 16,100 of the 17,500 investors affected will be given “a large part” of their money back.

The FSCS is believed to be crossing simpler cases off the list first, with 2,700 clients who had claims under £2,000 compensated around 10 months ago.

It is expected the remaining 1,400 cases will be addressed by April.

Administrators PricewaterhouseCoopers and The Share Centre communicated to the FSCS last week that Beaufort clients are now also a target for scammers.

FSCS: Beaufort Securities shows we do more than just compensate

The administrators say a number of Beaufort clients were approached by individuals claiming to be from PwC or The Share Centre.

The individuals are asking clients to transfer money to them to move their holdings to certain brokers.

The FSCS says: “We encourage clients to stay vigilant and act cautiously when receiving communications about the administration. These individuals are not acting on behalf of the administrators, PwC or any nominated brokers and Beaufort clients should ignore any requests of this nature.”

In the lifeboat fund’s 2019 Budget last month, outgoing chief executive Mark Neale singled out the Beaufort collapse, blaming poor advice for the need for further levies across the industry.

Beaufort left a significant dent in the FSCS’ coffers last year which was followed by the announcement of a new £175m levy on advisers for this year.

Neale expects claims related to failed pension and Sipp transfers to be 25 per cent higher in the 2019/20 financial year than in the last.

That figure is expected to account for 40 per cent of the FSCS’ total non-insurance, workload.

FCA to be probed on knowledge of DFM Beaufort’s collapse

The FCA is still in hot water over it’s knowledge about the state of Beaufort prior to its collapse as well.

Complaints Commissioner Anthony Townsend called for the disclosure of the watchdog’s files on Beaufort last December to carry out an investigation.

This followed a final report regarding a complainant’s questioning of the FCA’s awareness of allegations against Beaufort.

Townsend is expected to use files from the FCA to create a timeline of its associations with Beaufort dating back to 2016.

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  1. What about the other 1,400 investors?.

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