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Guernsey funds launch £20m legal claim against Arch’s Robin Farrell

The board of Guernsey-listed investment vehicles pursuing Arch Financial through a £150m legal action have filed a separate claim against Arch chief executive Robin Farrell for damages of £20m.

The board filed its original claim against Arch in January, alleging breaches of duty in the way Arch managed the investment portfolio of the cell companies between July 2007 and November 2009. It also alleged Arch failed to account for “substantial secret profits”. Arch was the fund manager behind the Arch cru range, which was suspended in March 2009 and prompted an additional £38m in Financial Services Compensation Scheme levies on investment and pensions advisers earlier this month.

Costs of compensating Arch cru investors also contributed to the £60m FSCS interim levy for 2011/12 on investment advisers in March, and the £33m annual levy on investment advisers budgeted for 2012/13.

Six of the 18 Guernsey cell companies that launched the original claim filed a supplementary particulars of claim document against Farrell last month.

The latest claim, seen by Money Marketing, relates to investments by the cell companies in Lonscale agreed by Arch and introduced by a company called Foundations Capital, incorporated in the British Virgin Islands. Lonscale was used as the investment vehicle to acquire Club Easy Group, which owned and operated student accommodation.

The claim alleges Farrell “dishonestly assisted” Arch in breaching its duty to act in the best interests of the cells by arranging for Arch and Foundations Capital to each receive £3m as part of the Club Easy deal, funded by the cells.

Farrell denies the claims. He says: “The claim is not prompted by any new factual revelation and is in our view a cynical attempt to cause reputational damage.”


UK unemployment falls by 35,000

UK unemployment has fallen by 35,000 to stand at 2.65m, according to figures from the Office for National Statistics. The fall, which covers the December 2011 to February 2012 period, is the first quarterly fall since May 2011. The unemployment rate was 8.3 per cent of the economically active population, down 0.1 per cent on […]


Whitechurch ditches restricted plan

The Whitechurch Network now intends to remain fully independent after the RDR, despite previous plans to offer a restricted service. Managing director Ian McIver says the company believes the new independence requirements are less onerous than it had previously feared. The network has around 180 advisers, including 30 mortgage and general insurance advisers, with 90 […]

Gilliat looks to trading range

Gilliat Financial Solutions has introduced a five-year structured deposit plan that provides annual income dependent on the FTSE 100 index trading within a specified range. The Gilliat range deposit – April 2012 will pay 7 per cent income for each year that the index goes up or down relative to its initial value by 21 percent […]


Labour warns over credit rating agency rules

Shadow Treasury financial secretary Chris Leslie is warning new regulation intended to reduce reliance on credit ratings agencies could fortify the position of the big three agencies unless more firms enter the market. European Commission proposals for the new rules known as Credit Rating Agencies 3 include requirements for firms to rotate the agencies they […]

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(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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