InvestmentsMay 16 2022

FSCS investigating claims against Cavendish Incorporated

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
FSCS investigating claims against Cavendish Incorporated
Pexels/Jan van der Wolf

The Financial Services Compensation Scheme is considering claims against Cavendish Incorporated, according to an update on its website.

The FSCS said it is aware that consumers may have invested "substantial funds" in bonds or loan notes issued by Cavendish or through its former appointed representative, Cottesmore Associates Ltd.

The lifeboat scheme explained that a business does not have to be regulated by the Financial Conduct Authority to raise funds by issuing shares or debt securities such as bonds or loan notes. 

However, any regulated activity carried out by a regulated firm in relation to bonds may give rise to a claim that FSCS can consider.

“Customers have alleged that Cavendish and/or Cottesmore gave unsuitable advice in connection with the investments,” the FSCS said. “Customers who believe they may have a claim against Cavendish should submit to claim to FSCS. FSCS will investigate whether these claims are eligible for compensation under our rules.”

Neither Cavendish Incorporated nor Cottesmore Associates have ever been permitted by the FCA to provide regulated advice on investments.

The lifeboat body said as part of its investigations, FSCS will be considering if Cavendish Incorporated can meet claims made against it.

Back in February, the FCA removed the permissions of two firms connected to Cavendish Incorporated, over concerns they could be selling investments to consumers without authorisation. 

The move meant seven firms, in what appears to be a group of credit brokers, have now faced regulatory action, after Grosvenor Associates had its permissions removed in December and Cottesmore Associates had requirements imposed in August.

The latest two firms, Falcon Financial Solutions and Thestral Financial Services, were no longer permitted to carry out any regulated activities.

At the time the watchdog warned those invested in either firm are now at risk of losing all of their money.

Falcon and Thestral were controlled by the same individual, Bhupinder Rehal. According to the FCA, Falcon is “connected” to Cavendish Incorporated.

sonia.rach@ft.com

What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know