Towry Law International is closing to new business following threats of legal action from offshore investors.
Investors in Cyprus, the Middle East and Asia claim they were missold hedge funds and geared with-profits policies by the IFA.
An action group in Cyprus, and a group in Hong Kong have started legal action against the firm. A small group of disgruntled UK investors is also believed to be seeking legal advice.
Money Marketing revealed in May that Towry Law International could face potential liabilities of up to £300m as a result of sales of hedge funds and with-profits policies.
TLI, owned by insurance and fund management group HHG, specialised in advising expatriates.
It is thought that around 750 investors could have suffered losses from two hedge funds marketed by TLI run by Asia Financial Asset Management.The funds collapsed in 2002 and are being investigated by the Hong Kong Securities Commission.
Following a strategic review, TLI will close its offices in Bahrain, Dubai and Tokyo with the loss of 40 jobs. Its Hong Kong office will remain open to deal with client servicing.
HHG says closing TLI will have no impact on the Towry Law's UK operations and is not expected to have any material impact on the HHG group.
Towry Law PR director Fiona Cornes says: “TLI has faced difficult market conditions. Following a strategic view of the business, it was decided that it was no longer commercially viable. The legacy issues have not helped. All the regulatory authorities are aware of the fact that we are closing and that we are taking our responsibilities to our clients seriously.”
Independent consultant Graeme Laws says: “One after another, these large IFAs are failing. The significant question in this case is why and what will happen to its liabilities.”
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