A group of up to 1,000 investors who lost money in the funds range Arch Cru have joined forces to file a case against Capita Financial Managers for its failures in supervising the Arch Cru funds.
The investors have found a London based law firm, favourable counsel’s opinion and third party funding to drive their claim into the High Court on a no-win no fee basis, the publication Investment Week.
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The £363.6 million worth Arch Cru fund range was suspended in March 2009 by the Financial Services Authority (FSA) following a warning that it could no longer trade due to pricing and liquidity issues.
Subsequently, some assets have been sold off at a heavy discount and the remainder o has been valued at around just £66 million.
Capita was neither fined nor made to compensate investors, on the claim, which stated that it had no responsibility for the funds underlying investments because it had set up, in an FSA brokered deal along with Arch Cru depositories BNY Mellon and HSBC, a £54 million redress scheme for investors.
FSA said would return 70% of their amount invested after some of the investors thwarted the deal.
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By GlobalDataInvestors in the Arch Cru fund, which contains about 70% of the total amount invested, are now estimated to receive just 58%, down 9.4% on the 64% estimated two years ago.
Until now, around 350 investors have formally signed up to this legal action, with a further 650 expected to join soon, a move which raises the claim against Capita to £30 million.
Chairman of the investors’ steering group John Hawkes said if the claim is successful, investors will get back 75% of the amount they invested from Capita.
Investors who have not accepted the FSA brokered £54 million Capita redress scheme can take part in the claim, as a condition of that deal was that any money received under it would be in full and final settlement.
The claim is the culmination of the investor action which has been supported by Gill Cardy’s IFA Centre.
Hawkes said IFAs have been seen as a soft target, with firms who advised on investments in the CF Arch Cru Investment funds being forced by the regulator to contact their clients asking if they want their case reviewed to determine whether they miss-sold the funds and may be eligible for redress.
