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Towry Law Intl could face £300m misselling claims

Towry Law&#39s offshore subsidiary is facing legal action that could result in compensation of more than £300m.

Clients in Cyprus, the Middle East and Asia have alleged that Towry Law International missold hedge funds and geared with-profits bonds.

An action group of clients in Cyprus has started legal proceedings against TLI. It argues that the IFA firm did not adequately explain the risks of gearing with-profits, including the possibility that the bank lending money could ask for extra collateral if market value reductions were imposed by geared policies.

In Hong Kong, Towry has admitted that two hedge funds which it marketed but which subsequently collapsed in September 2002 are under investigation by the Hong Kong Securities and Futures Commission.

A report by liquidator Deloitte & Touche has revealed that less than 3 per cent of the £30m assets in the global diversified trading and global opportunities trading hedge funds has been recovered.

Towry Law denies allegations of misselling and says the cases were reviewed by its compliance teams in Hong Kong and the UK. Group PR director Fiona Cornes says: “Towry Law International was not the fund manager for GDT and GOT. We conducted due diligence into the funds and offered genuine professional advice in good faith to our clients at the time.”

•Analysis, p13


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