The Financial Ombudsman Service (Fos) has paved the way for up to 150 claims against life settlements fund distributor Catalyst Investment Group after an appeal from the company was rejected.
The Fos made the decision in a test case brought about by Hampshire-based adviser firm Page & Page on behalf of a client who invested roughly £170,000 in the Luxembourg-based Arm Asset Backed Securities fund.
The Ombudsman is yet to confirm how much Catalyst must pay in compensation to the client, but a spokesperson for the Fos said it was still investigating 100-150 claims made against the company.
If Catalyst is unable to meet any claims awarded by the Fos then they will fall to the FSCS. This is in spite of a decision by the compensation scheme earlier this year that it would not compensate clients of defunct adviser firm Rockingham Independent who are invested in the same ARM fund and cannot access their cash.
Catalyst was the distributor of products backed by ARM Asset Backed Securities, a life settlements fund based in Luxembourg which is currently being restructured by its board and which has been suspended from dealing since mid-2010.
The company sold almost 2,000 products to UK clients, channelling £76.4m into the ARM fund, according to a 2011 disciplinary notice from the FSA.
