MP George Galloway has tabled an early day motion calling on the Financial Conduct Authority and Capita Financial Managers to accept responsibility for the collapse of the Arch cru fund range and to pay full investor compensation.
Galloway, Respect Party MP for Bradford West, has been working with trade body IFA Centre to highlight awareness among MPs about the fallout from Arch cru, which has seen up to 20,000 investors lose out after the £391m fund range was suspended in March 2009.
Early day motions are a vehicle for MPs to raise awareness around particular issues, and in rare cases can pave the way for parliamentary debate.
IFA Centre is encouraging advisers and affected investors caught up in the Arch cru collapse to contact their MP and invite them to back the motion.
The EDM follows an MP briefing held by IFA Centre last month setting out what had gone wrong with Arch cru.
IFA Centre managing director Gill Cardy says: “Tabling the EDM is a natural way for Galloway to continue to raise awareness of the unrecovered losses incurred by his constituents as well as thousands of other investors.”
Galloway says: “I am not alone in having constituents affected by the failure of the Arch cru funds and the failure of the regulator to ensure that all investors in the funds obtain compensation for their losses, including those left out in the cold by the FCA’s inadequate redress scheme.”
Capita was censured by the FSA in November for “serious failings” in the way it oversaw the funds. It escaped a £4m fine as parent company Capita Group contributed £32m to a £54m payment scheme agreed in June 2011 to compensate Arch cru investors.
A separate consumer redress scheme began in April where advisers who recommended Arch cru have to write to clients to ask them if they want to have their advice reviewed. The regulator estimates the scheme will deliver between £20m and £40m in redress.
IFA Centre is looking to bring a legal challenge against Capita on behalf of Arch cru investors who are not covered by the consumer redress scheme.