Companies  

‘Still time to join Arch Cru group action’

John Hawkes, chairman of the Arch Cru Litigation Committee, said: “We feel IFAs have been treated badly. Only a few advisers sold these funds and they should be penalised, but what you do not do is punish the whole industry. The cost of this whole affair will be passed to all advisers. It is damaging and counter-productive.”

He said it may be that success in this case could mean advisers can take action of their own afterwards and recoup the money the FCA has ordered them to pay in compensation.

The 800 members of the ACLC have been granted a group litigation order. The campaign has instructed city law firm Harcus Sinclair in its legal battle against the Arch Cru authorised corporate director Capita, and now accounts for £25m in claims.

In November 2012 the FSA found Capita Financial Managers to have failed in its oversight of the Arch Cru funds between June 2006 and March 2009.

The then regulator had arranged a “paltry” £54m redress scheme, with redress funded by Capita and depositaries BNY Mellon and HSBC, according to Adrian Mr Lithgow, spokesman for ACLC. This offer expired last year.

The ACLC is claiming that Capita breached regulations on collective investments and that investors lost money as result.

Mr Hawkes added: “The real target should be Capita, which had overall responsibility and the means to pay compensation.”

Mr Lithgow, spokesman for ACLC, said advisers could piggyback on the action to get compensation from Capita, and so offset the compensation they have been ordered to pay by the FCA, which totals £31m.

It is also understood that ACLC will make its legal material available to any adviser thinking of pursuing his or her own action. The deadline for investors to come forward is the end of March.

When asked for its response, Capita was unable to comment as at time of going to press.

Background

Harcus Sinclair could not be contacted, but a statement on its website said: “The High Court made a Group Litigation Order in relation to a group action to be pursued by several hundred investors in the CF Arch cru Investment Fund and the CF Arch Cru Diversified Fund against Capita Financial Managers Limited. Individuals who wish to be added to the register of claims should come forward as soon as possible.”