Law firm Regulatory Legal is looking to launch a judicial review of the FSA’s £54m compensation package for Arch cru investors on behalf of 2,700 investors.
This week, pressure group Justice in Financial Services filed a separate claim for a judicial review of the compensation package on behalf of Coull Money, an IFA firm that recommended the CF Arch cru funds. Coull Money has applied to the FSA to cancel its regulatory permissions.
In June, the FSA revealed that Capita Financial Managers, BNY Mellon Trust & Depositary and HSBC Bank had agreed to contribute to the £54m fund, which will be used to make payments to eligible CF Arch cru investors.
Alongside distributions already made and remaining assets, investors who accept the compensation deal should receive around 70 per cent of the net asset value of their funds when the range was suspended in March 2009.
As part of the agreed compensation, payments from cases brought to the Financial Ombudsman Service against Capita, BNY Mellon and HSBC will be restricted so that they are similar to the payments that would be awarded through the compensation package.
Investors will still be able to pursue their IFA for further compensation.
Regulatory Legal says it will look for a judicial review on the basis that investors have been asked to accept an offer without having enough knowledge about it.
Partner Gareth Fatchett says: “We have no doubt that this is an arguable case. It is appropriate that IFAs have submitted an application as well, because we cannot just let this offer drift by and accept it.”
Axxis Financial Planning director Owen Wintersgill says: “It is ludicrous if investors have to accept the compensation package without knowing what the full settlement is.”