Investors could lose a total of at least £430,000 after they were advised to invest in a unregulated scheme that employed asset lending to benefit from payment protection insurance claims, Martin Taylor has said.
The director of unregulated collective investment scheme claims manager Rebus said he was representing 11 investors, at least one of whom had been advised to take money from his self-invested personal pension scheme and invest it in Guardian Analysis, a fund which has gone into administration, taking their money with it.
Mr Taylor, who said there may be more investors whose money was at risk, said some of the clients were advised to invest in this fund by a financial adviser who, Mr Taylor claimed, is no longer trading.
He said these investors could not yet apply to the Financial Services Compensation Scheme based on the advice, because the firm that advised them has not yet been declared insolvent by the FCA and cannot be named for legal reasons.
The Guardian Analysis fund was one of four Ucis operated by Guardian Administration that were placed in administration by the Isle of Man Financial Supervision Commission on 18 July 2013.
There is no suggestion that the other three schemes are involved in asset lending.
In one letter, a man was advised to transfer £40,000 out of his tax-efficient Sipp and put it in a property unit trust with Guardian Analysis acting as the main investment vehicle.
According to Guardian Administration, assets in the Analysis fund were pooled into an investment system known as the Investment Model.
This model, described as a PPI Mis-selling Claims 180 Day Scheme in product literature, claimed to take advantage of a legal loophole that meant credit agreements taken out before April 2007 were “unenforceable in law” due to a technicality.
The fund loaned investors’ money to claims management companies to fast-track the claims process as a result of this loophole, with the aim of repaying funds when the claim was settled with the lender within 180 days.
The FCA declined to comment on the status of the advisory firm or the Guardian fund.
According to documents at Companies House, Bury-based Guardian Administration was incorporated on 8 May 2008 and dissolved on 5 January 2010.
Malcolm Greenlees, an overseas director of Guardian Administration, said that the scheme would only be able to meet its obligations to investors once two professionals who have allegedly been loaned money repaid the funds.
Selwyn Hotz, the proprietor of Bury-based chartered accountants Hotz & Co and the fund’s loan administration agent, said: “We were appointed by Guardian to transfer funds to CMCs and had an agreement to repay the money after the settlement of the claims by those CMCs.”
However, he claimed that the funds were still awaiting money allegedly owed and could not repay investors until the money was reclaimed.
To do this, he said Guardian Administration needed the approval of Browne Craine & Co, the fund’s administrators appointed by the Isle of Man FSC. The FSC did not respond to requests for comment, but a statement issued by the FSC in August 2013 said the scheme’s administrator, Ardent Fund Solutions, had surrendered its licence.
It is not clear whether Ardent has been dissolved.
Right to reply
A spokesman for chartered accountancy firm Browne Craine & Co said: “We decline to comment as it is a ongoing matter. We have to bear in mind that our client is the Isle of Man FSC and we have to maintain confidentiality until the matter becomes public.”
Fos View
The Financial Ombudsman Service had previously expressed concerns about PPI claims and unregulated funds seeking to take advantage of the huge PPI misselling debacle. A spokesman for Fos said: XXXXXXXXXXXXXXX TO COME
