Clients of collapsed discretionary fund manager Beaufort Securities will soon get their money back from the Financial Services Compensation Scheme, the lifeboat fund has announced.
The “vast majority” of clients of Beaufort Asset Clearing Services will see 100 per cent of their cash and assets returned after a plan to compensate clients was agreed, the FSCS says.
Beaufort Securities became infamous earlier this year after the £800m DFM became the target of an FBI investigation and FCA sanctions.
US authorities 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 FCA had stopped Beaufort taking on new money since last December, but applied to wind it down in March.
Around 23,000 clients were affected, 17,000 of which the FSCS classifies as retail customers.
In a note on its website the FSCS says Beaufort’s creditors agreed a distribution plan on 13 July, which the High Court approved last week and took effect on Friday.
The FSCS says the plan “provides for the return of client money and client assets in September 2018 via a transfer to a nominated broker”.
It adds: “The FSCS will enter into an agreement with [administrators] PwC to meet the shortfall arising from PwC’s costs for eligible clients. FSCS will arrange for these costs to be met directly with PwC. This will mean that the costs will not need to be taken from client assets and client money.”
“We expect nearly all of the firm’s individual and small business customers will be protected by FSCS so that assets and cash can be returned without any loss.”