The Financial Services Compensation Scheme has started processing claims for a trio of unregulated property funds, finding that advisers are liable for any losses suffered by customers despite an investigation into fraud by the Serious Fraud Office.
Earlier this year, the FSCS said it was delaying making any decision regarding payments on claims against three Stirling Mortimer funds as they are being investigated by the SFO.
The FSCS said it was aware that the SFO is currently undertaking investigations into three Stirling Mortimer funds, listing the No.4 Cape Verde fund, No. 6 Morocco fund and No. 7 Cape Verde II fund and that it is considering the implications of the SFO’s investigations.
However, the FSCS said in a statement it is now able to start processing claims in relation to these funds.
It said: “FSCS has considered the liability of the defaulted independent financial advisers that advised customers to invest in these funds.
“Based on the evidence that is available we are satisfied that, where mis-selling can be proven, the IFAs can be held liable for any losses suffered by customers in relation to the three Stirling Mortimer funds.”
In July last year, FTAdviser reported the SFO was investigating an allegation of fraud against a number of investment funds operated by the troubled Stirling Mortimer Global Property Fund, a protected cell company with limited liability based in Guernsey.
At the time the SFO said the investigation was primarily focused on three SMGPF unregulated funds which operated between 2007 and 2011, including Stirling Mortimer No.4 Fund Cape Verde, Stirling Mortimer No.6 Fund Morocco and Stirling Mortimer No.7 Fund Cape Verde II.
This follows the FSCS’s announcement last month that advisers who recommended their clients switch their pensions into self invested schemes are liable for losses in relation to embattled overseas property group Harlequin.
In an update, the FSCS said it will start compensating claimants for losses in the value of a range of esoteric investments held in Sipps, as well as compensating for lost pension growth and charges.
donia.o’loughlin@ft.com
