The FSA says it has not ruled on whether Capita Financial Mangers should be held legally responsible for Arch cru investors’ losses, but says no disciplinary action will be taken against BNY Mellon Trust & Depositary and HSBC Bank.
The regulator has written to law firm Regulatory Legal in response to the firm after it challenged the £54m compensation package on behalf of 2,700 investors. Regulatory Legal announced last month that it planned to launch a judicial review of the compensation deal.
Pressure group Justice in Financial Services has already applied for a judicial review of the compensation package.
In June, the FSA revealed that Capita, 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.
The terms of the compensation package mean that if complaints are upheld against Capita, BNY Mellon and HSBC by the Financial Ombudsman Service the awards will have to be in line with the payments on offer through the compensation package. Investors will still be able to pursue their IFA for further compensation.
In the letter sent to Regulatory Legal last week, which has been forwarded to clients and seen by Money Marketing, FSA legal group solicitor Jon Gerty says: “I can confirm that the FSA has made no determination that CFM is legally responsible for any investor losses. I can also confirm that the FSA will not be taking any disciplinary action against either BNY Mellon or HSBC in relation to their role as depositories of the funds.”
The FSA maintains the £54m compensation package is a “good outcome” for investors, and that redress does not necessarily entitle investors to a 100 per cent recovery of their losses.