The Financial Services Compensation Scheme is reviewing claims against an advice firm whose clients claim they were advised to buy unlisted shares in a fraudulent company.
London-based Saxon Capital has been under investigation by the lifeboat scheme since July 2019 and last week (January 2) the FSCS published an update saying the claims had been moved to the scheme’s processing teams for assessment.
Saxon Capital was dissolved in March 2017 but has not yet been declared in default by the FSCS. The scheme needs to uphold at least one claim to be able to declare the firm in default.
The FSCS has previously concluded that Saxon Capital could owe a civil liability to its customers who received advice to invest in unlisted shares.
The lifeboat scheme has already received a number of claims against the firm from customers who bought unlisted shares in a company called Oxford Renewable Fuel, which was advertised as a producer of commercial quantities of biofuel and a "market leader" in renewable energy.
The company raised £7m from 340 investors through a number of independent financial advisers, including Saxon Capital.
The victims were promised high returns and told the company had 40 scientists involved in the project who needed to raise a further £2m to build the operation.
The FSCS said it was also aware of a number of other unlisted company shares which may have been sold by regulated IFAs in a similar way — Otreus Oil and Gas Company, Crescent Energy, and Palmetto Energy.
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