Regulation  

Compensation scheme receives Arck adviser claims

The Financial Services Compensation Scheme has received multiple claims against IFAs who are no longer trading in relation to the advice they gave to invest in the failed Arck LLP investment vehicle.

Set up to develop and sell overseas-based properties, Arck was placed into adminstration in 2012.

Although the FSCS recognises that investors have “suffered significant losses”, it says that the cause of these losses is currently unclear.

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The Serious Fraud Office is investigating allegations of fraud involving Arck investments, and the FSCS is waiting until the SFO concludes its investigation before deciding whether or not it will pay any compensation to investors.

The SFO has previously called on advisers to provide information on Arck, with law firm Regulatory Legal estimating the case could amount to £60m in claims.

In May, 16 MPs including former chancellor Alistair Darling and Treasury select committee member Mark Garnier promised to take action to help Arck investors.

Plans included a Treasury select committee debate and increasing pressure on the Financial Ombudsman Service to help investors.

The FSCS has said it is considering paying compensation to clients of HD Administrators in relation to the HD self-invested personal pension, which is linked to Arck.

Bob Woods, chairman of Mattioli Woods, told FTAdviser his firm had identified a £12m gap in HD Sipp’s books.