The FSA says its enforcement division has significantly widened the scope of its investigation into possible collusion between companies in the split-capital investment trust sector.
Speaking at the AITC conference for directors in London this week, FSA managing director John Tiner said the FSA had stepped up the initially small investigation to encompass many more fund firms and brokers.
He said the inquiry was now the biggest that the regulator has taken on, as it has had to bolster its enforcement division's resources significantly to cope with the “spider's web” it is trying to unravel.
Ensuring investors are compensated is a key aim for the FSA, said Tiner, who urged companies to compensate disgruntled investors without the FSA or Financial Ombudsman Service having to order them to do so.
By taking this approach, Tiner said fund firms could go some way to restoring the sector's image.
He said: “The scale of the investigation has been increased significantly to encompass many more firms, covering both managers and brokers. It is open to firms to compensate investors without waiting being ordered to and we would encourage them to do so without delay.”
Hargreaves Lansdown head of research Mark Dampier says: “If companies compensate investors it is an admission of guilt and then the floodgates will really be open. I cannot see many firms believing that they are to blame.”