Where am I? 
Home Investment Regulation
Categories: Regulation
Topics: Thinc Group| blog| Capita| Arch cru| AWD Chase de Vere| Alliance & Leicester| Egg| UBS| HSBC| Commerzbank| RBS| Zurich| Goldman Sachs| Scottish Equitable| Barclays Bank| NatWest| Norwich and Peterborough| Bank of Scotland
Arch cru investors want to know why Capita won't be fined like 27 other firms who they say failed in the same way. Levy paying IFAs should want to know too.
The FSA has yet to publish its review into the role of Capita, the authorised corporate director (ACD) of the funds, in the Arch cru debacle.
But Capita has refused to accept any liability - and has already said no financial penalty will be imposed on it by the FSA.
Arch cru investors who argue the recently announced £54m payment package will return just 50% of their original investment, plan to challenge the FSA's view that the deal it brokered is the best outcome possible.
They say Capita failed in its role as ACD to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
They also say the FSA is making an unfair exception for the company with the £100m five year government contract with the DVLA.
Their evidence is compelling - in three years of enforcement action involving this type of failing at similar sized companies (see table below), the FSA has imposed severe fines in 27 cases.
Arch cru investors want to know, why not Capita?
They are not the only ones who should be asking that question.
Investors unhappy with the deal from HSBC, BNY Mellon, and Capita - which today announced H1 2011 pre-tax profits up 7% to £174m - are likely to seek redress from the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Organisations and compensation paid for by levies from IFAs.
| Year | Month | Firm | FSA Fine (m) | |
| 2008 | May | Thinc Group | £0.9 | |
| Sept | GE Money Home Lending | £1.12 | ||
| Nov | AWD Chase de Vere WM | £1.12 | ||
| Oct | Alliance & Leicester | £7.0 | ||
| Dec | Egg Banking | £0.721 | ||
| Jan | HFC Bank | £1.085 | ||
| July | Liverpool Victoria Banking Services | £0.840 |
||
| 2009 | Jan | Aon | £5.25 | |
| Aug | UBS AG | £8.0 | ||
| Oct | Swinton Group | £0.770 | ||
| Oct | GMAC-RFC | £2.8 | ||
| July | HSBC Actuaries and Consultants | £0.875 | ||
| July | HSBC Insurance Brokers | £0.7 | ||
| July | HSBC Life (UK) | £1.61 | ||
| 2010 | Feb | Direct Sharedeal | £0.101 | |
| Feb | RSM Tenon Financial Services | £0.7 | ||
| April | Commerzbank AG | £0.595 | ||
| June | JP Morgan Securities | £33.32 | ||
| Aug | RBS Group | £5.6 | ||
| Aug | Zurich Insurance | £2.275 | ||
| Sept | Goldman Sachs International | £17.5 | ||
| Dec | Scottish Equitable | £2.8 | ||
| 2011 | Jan | Barclays Capital Securities Ltd |
£1.12 | |
| Jan | Barclays Bank plc | £7.7 | ||
| Jan | RBS & Natwest | £2.8 |
||
| Apr | Norwich and Peterborough BS | £1.4 | ||
| May | Bank of Scotland Plc | £3.5 |
Final notices for each firm can be found on the FSA's website here.
| Share | |
| Comment | The curious case of Capita and the 27 fined firms |
More regulation news
Email alerts
Recommended reading
Categories
Topics
Comments
The curious answer to your question Laura
Hi Laura, The answer is the 27 who got heavily fined were generally financial businesses convicted of various mis-selling activities under English sales law. Capita is the regulator, not a Fund, and they are depending on the Arch cru simplified Prospectus to protect them. The Prospectus was written so widely it actually offered no protection to the investors at all - Arch could have invested in selling snowballs to the Eskimos and it would be alright according to the Prospectus. The other benefit of a widely drafted prospectus is it drives down compliance management time, and increases profit. Let's not forget CFM laid off about 400 Pensions and Compliance staff in January 2009. The FSA agreed the Prospectus with CFML. So CFML are able to say, where's the case for fining us? The website archcruinvestor.wordpress.com has much more on this scandal and is collecting the now redacted historical documents prior to 13th March 2009.
Posted by: Chris Clark
Capita/Scottish Widows
Capita's maladministration re Scottish Widows pension plans caused substantial concern & potential losses to Clients. Complaints to Scottish Widows were ducked by stating that these should go to Capita-end of the road! With which party did the client have a contract? End result the caring IFA suffered non-recovered costs.
Posted by: Alan Nedas
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
This year we have 14 awards designed to mark out the very best products in a highly competitive and innovative market. This includes three new awards for 2011 to reflect the developments in this rapidly growing market: Best Dual/Multi-Index Product, Best Structured (Oeic) Fund and Best Structured Product Provider.
Events
Poll
|
|
Job search
Ifaonlinejobs will open the right investment career path for you. Search hundreds of vacancies on www.ifaonlinejobs.co.uk now
In Focus
Two months left before the ‘real RDR deadline’ – are you compliant with the required professional...
Viewpoints
2012 marks a watershed for the Life companies, fund managers, banks and advisers who service...
sponsored by
Capita Not being Fined
A cynical person might feel that the SFO should be involved to investigate and eliminate any potential "conflicts of interest"/ "family connections" between board members of the FSA and Capita.
Posted by: John Morgan