Investors in the scheme, which is said to have been “offered by” former Sense AR Midas Financial Solutions or advisers connected to the firm, have contacted FTAdviser seeking information on how they can get their money back.
According to a letter sent by Police Scotland to investors, seen by FTAdviser, a “criminal investigation” is being carried out by the Economic Crime Unit in Aberdeen, after it was passed information by the regulator following its own earlier investigation in August.
The probes concern “short-term investments... offered by Midas Financial Solutions and Independent Financial Advisors attached to that firm [sic]”.
Steve Young, chairman at Sense, told FTAdviser that his understanding was that the scheme was not operated by Midas, but by one individual via a separate business. “As a consequence, this falls entirely outside of our AR relationship with Midas,” he said.
According to the FCA’s Financial Services Register, the firm was led by financial advisers Alistair Grieg and Ian Towe and was a Sense AR from September 2007 until August this year. The relationship was ended without knowledge of the FCA investigation, according to Mr Young.
He added: “Whilst we know very little about the alleged scheme, we can confirm that Sense has never been authorised to conduct deposit taking. Any adviser undertaking such activities would have been operating illegally and outside of the authorisation provided by Sense.”
The Police letter also states the FCA has advised Midas was not authorised to accept deposits and, as a result, the scheme is not regulated and is not covered by the Financial Services Compensation Scheme.
The FSCS confirmed to FTAdviser that liability would lie with the individual responsible for any wrongdoing that is found, so it cannot accept claims against Midas.
The Financial Ombudsman Service stated that if criminal activity is determined to have taken place then claims would most likely have to go through the courts.
A spokesperson said: “Consumers can bring complaints about regulated businesses to the ombudsman - but we can’t investigate complaints about unregulated businesses. There are times when a regulated business gives advice about an unregulated product – this is where things aren’t always straightforward.
“However, an appointed representative should only be advising on behalf of the firm it is representing. In this instance, the advice is allegedly about a fraudulent scheme, which makes this a criminal matter.”
The police letter to investors states Midas is “not currently trading” and the FCA register lists it as no longer authorised. The website address listed returns an error message; mobile and landline telephone numbers available for the firm ring out.
It was not possible to reach either Mr Grieg and Mr Towe for comment at the time of writing.
peter.walker@ft.com
