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Prime Minister David Cameron joined the fight to force the FSA to reveal what it knows about the failure of the Arch cru fund range, just days before today's announcement of a £54m compensation package for investors.
The PM promised to put "further pressure" on the regulator if it failed to report its findings to investors by June, in a signed letter to a constituent who is an Arch cru investor.
Arch cru cells' assets, which have plummeted in value by around 40%, have been frozen since March 2009.
The FSA had been investigating problems with the fund range and Capita, its authorised corporate director, since 2009 but told investors nothing about its findings, until today.
One unhappy investor contacted the Prime Minister to ask him for his help in resolving the situation. In his response the PM said "several constituents have questioned the FSA's handling of this matter".
It continues: "I know how frustrated investors are that fund assets have been frozen for so long and can assure you that Ministers are aware of the broader points you raise.
"On investigation, the FSA said it intends to publish more information before the end of June. If this does not happen, I would be happy to put further pressure on the FSA to communicate with investors."
The promise from the PM to add his weight to calls for the regulator to explain what it has been doing in the two years since the Arch cru funds were suspended in 2009 is underlined.
Elsewhere the letter refers to the coalition government's decision to break up the FSA and establishing a Financial Conduct Authority to "protect consumers better".
The PM signs off with a promise to personally "closely monitor the FSA's actions in the coming weeks in relation to CF Arch".
Gareth Fatchett, partner at law firm Regulatory Legal which acts on behalf of about 2,500 Arch cru investors in a case against Capita, said: "The FSA need to let people know what is going on.
"To date they appear to have been entirely ineffective in dealing with this matter."
Pressure is mounting on the Treasury over Arch cru after a second MP last week called for the government to step in and investigate the role of the FSA in the failure of the cru fund range.
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| Comment | Exclusive: PM supported govt pressure on FSA over Arch cru |
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WHAT ABOUT KEYDATA?
Cameron has sat on his backside and done nothing to force the FSA to loosen up on its policy of "treat em rough and tell em nothing". Neither he nor any member of his cabinet have stepped into the firing line to force Sants & Co to come clean on the travesty that was Keydata. Maybe this Government is hoping that the problems created for thousands of investors by the inefficienct blunderings of this inept regulator will simply disappear. Roll up Stewart Ford and hammer them. This regulatory system has had it's day and it is a sad day when the express wishes of people in this industry are either ignored or swept under the carpet.
Posted by: CHAY
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Arch Cru debacle
Let's hope the PM is genuine when he says he will personally monitor the situation and that miniters are aware. And yes, what have the FSA being doing for two years and for good measure, why are the banks allowed to get away with mis-selling crap with nothing more than a wrist slap?
Posted by: Neil Shillito