Ernst & Young (E&Y) has instructed the board of the ailing ARM Asset Backed Securities life settlement fund to publish how much was raised by the sale of its portfolio in November.
ARM sold its portfolio of second hand life insurance contracts last year to Financial Credit Investment I Limited, but did not say how much was raised by the sale.
The FSCS is processing claims for compensation against Rockingham Independent, a key UK distributor of ARM products, but cannot complete the process until it can quantify any losses made by investors. A successful sale and restructure of ARM would reduce the burden placed on the FSCS.
Before being placed into administration Rockingham was fined £35,000 in 2011 for mis-selling ARM products.
E&Y, which was appointed as supervisory commissioner by the Luxembourg regulator in November 2011, has been beseiged by investors in the fund demanding information on its future.
Income payments ceased in August 2011 and ARM has been issuing sporadic statements on the Irish stock exchange since, but investors have grown restless as they have been unable to quantify losses and claim compensation.
A statement issued by E&Y on January 15 said ARM was considering several options for a restructure including rolling the fund back into “unrelated senior life settlement activity”.
Supervisory commissioner Jean-Michel Pacaud had instructed the board of ARM to prepare interim financial statements to show how much money was raised by the recent sale of assets. Mr Pacaud also told the board that it must respond to investors by sending out individual statements setting out each investor’s situation following the transaction.
E&Y said preparing the statements could take “several weeks” as ARM does not have direct access to the relevant information.
