After a year long investigation by the Financial Services Authority, 18 investment firms have escaped punishment by signing up to a deal to put £194 million aside for investors in failed split capital investment trusts.
Four companies and eight individuals have refused to sign the deal, meaning that they are still facing proceedings against them. Compensation will be available to the individuals who invested in zero-dividend preference shares and in some specified unit trusts and other financial products that have invested in zeros.
Our view
Whilst has not been involved or ever sold this type of contract, we have every simpathy with those that have and are now facing compensation bills. Likewise, we have sympathy with all those people who have lost money. Some blame must lie with regulators and industry educators i.e. the Professional Examination Boards and the old regulators. It was not that long ago, and yes we do have the study books, that some people were saying the zero dividend preference shares as part of split capital investment trusts were low risk!