FSA seeks £100m for investors who lost out in Arch cru freeze
THOUSANDS of investors who were mis-sold Arch cru funds are in line for an extra £100m compensation.
The Financial Services Authority has used new powers to set up the scheme after investors seeking low-risk products ended up with high-risk assets such as shipping and venture capital. Arch cru shareholders were locked into losses when the funds were suspended in 2009 due to more withdrawals than they could meet.
The regulator has launched a three-month consultation on setting up the redress scheme for an estimated 15,000 investors who were mis-sold the CF Arch cru Investment and Diversified funds by several hundred high street financial advisers.
Firms would have to contact their customers within four weeks of the scheme coming into force.
The firms would have to work out, using an FSA calculator, how much money each investor should receive within a few months, taking into account any money already awarded last year, when three groups involved in administering the funds – Capita Group, Bank of New York Mellon and HSBC – agreed to contribute £54m in compensation.