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Fscs pledge on ‘phoenix’ cash

The Financial Services Compensation Scheme says it will start working with liquidators to claw back cash from IFA bosses that dump assets in “phoenix” firms.

New FSCS chief executive Loretta Minghella has set out a hard-line plan to ensure that bosses who wind down firms with client assets still in them are chased for as much money as possible.

The increase in the FSCS levy to IFAs announced this week has put the scheme under pressure to chase the chiefs of the phoenix firms. The FSCS has no powers to fine firms directly and cannot hand cases back to the FSA for potential enforcement.

Minghella says: “I am aware there is concern about firms that deliberately dump client assets in an insolvent firm. I am going to work with liquidators to ensure every possible penny comes from these firms so other levy payers do not have to pay the bill.”

Jamieson Financial Management principal Bruce Jamieson says: “It is a step in the right direction but they have got to give this thing teeth to make it work rather than just pay lip service to the problem. It is only fair that these people pay up when they deliberately defraud.”FSCS furore, p3

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