This page provides updated information to investors in the Connaught Income Series 1 Fund (the Fund), an unregulated collective investment scheme, who may face significant potential losses (see previous FSA and FCA alerts and updates).
A number of authorised firms were involved in the Fund. These include:
- the operators of the Fund (Capita Financial Managers Limited (Capita) from April 2008 to September 2009 and Blue Gate Capital Limited (Blue Gate) from September 2009 to December 2012)
- financial advisers who may have advised consumers to invest in the Fund
- Tiuta PLC (in liquidation)
Update - December 2016
The FCA Board will appoint an external third party to conduct a review into the regulation of firms connected with the Connaught Series 1 Income Fund. The substantive review will begin once the current enforcement investigation has ended. The FCA intends to publish the outcome of the review, to the extent that we can.
Agreement between Connaught Income Series 1 Fund and its former operator, Capita
From July 2015, the Financial Conduct Authority (FCA) held a series of bilateral discussions with the liquidators of the Fund and Capita to explore whether an agreement could be reached to end civil legal action between the two parties.
A settlement between the liquidators and Capita has now been reached, as a result of the talks facilitated by the FCA, meaning that the significant cost of the litigation has now been stemmed. The FCA has asked the liquidators of the Fund to distribute the settlement sum to investors as soon as possible.
As the FCA is not a party to this settlement, it is not at liberty to provide any detail on its terms, which are subject to confidentiality provisions between Capita and the liquidators of the Fund.
The FCA’s formal investigation
On 10 March 2015 the FCA announced that we had decided to formally investigate the activities of Capita and Blue Gate in connection with their roles as operators of the Fund. This investigation will continue independently of the settlement of the civil legal action between the liquidators of the Fund and Capita.
We continue to devote significant time and resource to the investigation. The underlying events and issues are complex, so we are unable to say at this stage how long it will take to conclude our investigation.
As with other enforcement investigations, we will not comment on it as it progresses. This is consistent with the practice of other law enforcement agencies. We know this can be frustrating for interested parties, but we are legally bound to confidentiality and must follow due process before making public any views or judgements. To give a running commentary on our progress would be unfair to the subjects of our investigations and anything we say could, once all the evidence is gathered, turn out to be misleading. Additionally, any public statement we make could prejudice our investigation.
We appreciate that many investors are still out of pocket and understand that they want some certainty about whether and when they can expect to receive any compensation. We are actively working on this case and are committed to undertaking the investigation as quickly as possible. However, until it is concluded, no decision can be taken on whether to exercise our statutory powers to, for example, obtain redress for investors. We will update investors as soon as we can and, in the interim, we expect all parties to co-operate fully with our investigation.
The fact that firms are under investigation does not mean that we have reached any conclusions on whether any wrongdoing has occurred.
What investors can do
Separately to the investigation we are undertaking, investors should be aware that they may be able to obtain some compensation by going through a number of other regulatory bodies. As such, and pending the outcome of our investigation, we encourage investors to consider what they can do to protect their position.
Making a complaint to a firm or firms
If you wish to complain to one or more of the authorised firms involved in the Fund, for example because you are dissatisfied about investment advice received or the operation of the Fund, then you should make your complaint(s) to the relevant firm(s) as soon as possible. If you delay, you may lose your right to have your complaint considered by the firm and by the Financial Ombudsman Service.
The time limits generally fall six years after the event or (if later) three years from the date on which you became aware (or ought reasonably to have become aware) that you had cause for complaint.
For the contact address of any authorised firm that you wish to complain about, please search the FCA’s Financial Services Register.
Refer your complaint to the Financial Ombudsman Service (the ombudsman service)
If you are dissatisfied with the response you get to your complaint, you may be able to refer your complaint to the ombudsman service.
More information about the ombudsman service is available on its website[1].
Make a claim about investment advice given by a financial advisor to the Financial Services Compensation Scheme (FSCS)
If the authorised firm is not able to pay claims against it, you may be able to recover compensation from the FSCS up to £50,000 per investor, per authorised firm. If you wish to make a claim to the FSCS, you should do so as soon as possible, as the FSCS is required to consider the potentially more stringent time limits under the Limitation Act 1980 when assessing a claim.
More information about the FSCS is available on its website[2].
Assigned claims
If you have assigned your right to bring a claim or your interest in the Fund to the liquidators of the Fund, you may need to contact the liquidators before making a complaint to the firms that operated the Fund (or to the ombudsman service) or submitting a claim to the FSCS. Your right to pursue a claim (whether via the Fund, in your personal capacity or otherwise) against Capita could be affected by the settlement of the civil legal action.
If, instead, you have already assigned and/or sold your right to complain or claim to a third party other than the liquidators (for example a commercial claims handler), then, again, depending on the terms of the assignment, you may need to contact them and seek the re-assignment of your right before complaining or making a claim.
Given that the Fund was launched in April 2008 and was suspended in March 2012, investors should consider the time limits for making complaints and claiming compensation as a matter of urgency. Investors may also wish to seek independent advice.