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MPs today accused the Financial Services Authority (FSA) of failing in its duty to regulate Capita's management of the Arch cru fund range and of trying to cover up its failings by colluding with the company to force a £54m payment scheme on investors.
At a parliamentary debate in Westminster this morning, one MP accused the regulator of a "clear conflict of interest" over the £54m payment deal it brokered with Capita, HSBC and BNY Mellon.
The FSA has told investors the scheme will return about 70% of their capital, which it said would represent a "good outcome".
But investors argued it will return closer to 50% and will not be guaranteed. They said they can not make an informed decision about the offer's merits until the FSA publishes the findings of its review into Capita. However, this is not currently expected until after the current lapse date of the offer.
If investors take the deal, they forgo any other rights to pursue the three companies.
One MP said: "The FSA is both the regulator who arguably failed and the negotiator [of the payment scheme] in a clear conflict of interest.
"The problem is not just of the FSA's dereliction [of duty] but of its deviance and collusion with Capita which is blatantly offside. Is it not time now for parliament to blow the whistle on its behaviour."
MPs have called for an inquiry - independent of the FSA's - to look into regulatory failings in the lead-up to the suspension of the Arch cru fund range.
At the same hearing today, Mark Hoban, the financial secretary to the Treasury, said he backed Capita's Arch cru payment scheme and told investors they should go after their independent fnancial advisers (IFA) for compensation.
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You're not missing anything...
You're not missing anything, Mark Hoban is just a plank.
Posted by: John Smith
Stick by the rules!
As I understand it each investor in a failed firm is entitled to compensation of 100% of his investment up to £85,000. The FSCS should pay out in line with the rules, and when the FSA has concluded its investighation the FSCS should pursue the guilty parties for all the compo paid out. Seemples!
Posted by: Green Eyed Monster
Recognition at last!
Deviance and collusion (and I’ll bet that there will be those who would love to add to these epithets). And that’s only in connection with Arch Cru. What about the Ford Saga, the banks and goodness knows what else? Yep Hon members, that’s our Canaries. So bearing in mind you are about to install a new variant, how about ensuring we all get something better.
Posted by: Harry Katz
Hoban
Mark Hoban is not just a plank. He is a rotten, crooked plank
Posted by: Bob
FSA deviance
Can I hear a penny dropping ? At last, our elected representatives are realising the folly of allowing this quango unfettered powers and an almost unrestricted remit on what it can do. As for Hoban, every IFA has had the measure of this moron for quite some time now - he is ignorant, arrogant and out of his depth.
Posted by: Bill Wells
Regulatory Collusion
Sadly, the FSA is not the only regulator to protect its reputation. Luxembourg does the same (and it is worse in a small market). Allowing providers to act with impunity to protect the brand of the regulator at the expenses of shareholders. Shame class action suits are not better recognised in Europe as shareholder redress.
Posted by: Alt Whistle
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Compensation from IFAs
Can someone please explain to me how IFAs are meant to compensate their clients when PI companies on renewal will exclude any claims in relation to Arch Cru clients? Are we meant to sell our homes or am I missing something here?
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