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FSCS declares Echelon Wealth Management in default

The Financial Services Compensation Scheme has declared Glasgow-based Echelon Wealth Management in default and says up to 900 customers could claim for compensation.

Echelon, a contracts for difference broker, went into liquidation in October 2008 and does not have the money to pay claims against it.

The FSCS says 35 investors have already made a claim for compensation and they will be a priority. It adds that it expects to make the first compensation payments in June.

The firm’s customers can claim up to £48,000 in compensation.

This follows the default of two stockbrokers, Pacific Continental Securities and Square Mile Securities, which added £38m in FSCS levies for the investment adviser community this year.

Liquidators Smith and Williamson are working with the FSCS and will provide the scheme with the information it needs to value claims.

The FSCS will send application forms to customers of Echelon by the end of June. Once the FSCS receives the information from the liquidators, it will begin processing claims against the firm.

FSCS chief executive Loretta Minghella says: “The FSCS is gearing up to help customers of Echelon Wealth Management Ltd. We will make the first payments to Echelon customers this month. You may be able to claim up to £48,000 if you have lost money from your dealings with the firm. Once you receive a form, please return it to us so we can assess your claim. We are ready to help.”

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