FSA questions Danner over Cru marketing

Cardiff-based IFA SD Asset Management has gone into administration and is being questioned by the Financial Services Authority about its involvement in the marketing of the suspended Arch Cru funds.

The FSA has questioned Stephen Danner (pictured), SD Asset Management managing director, over the firm’s role as the principal of Cru Investment Management between March 2005 and May 2008.

The FSA probe focuses on Danner’s role in approving marketing for the six Arch Cru funds promoted by Jon Maguire and Cru Investment Management, according to a source close to the situation. ‘The FSA has gone after Stephen because he authorised Maguire…Stephen is an easier target,’ said the source. ‘The FSA are toasting the early promotions [of the fund].’

SD has also faced a number of complaints from clients it advised to invest in the funds, according to a former SD Asset Management employee, who said that Danner was trying to cut costs at the business. ‘He [Danner] let staff go around three of four months ago to try to reduce his costs because he has had a number of complaints about Arch Cru,’ said the former employee. 

The FSA register shows that four advisers left SD Asset Management in March and another in January. Danner, who was a director of Cru Investment Management between February 2005 and January 2009, was contacted but declined to comment. But lawyer Gareth Fatchett, partner at Regulatory Legal, which is acting for SD, said: ‘We can confirm that Mr Danner has been co-operating with the FSA in relation to issues relating to the Arch Cru funds.’

Arch Cru investors are still waiting for a report on the valuation of the underlying cells of the six funds, intended to establish why the funds’ value dropped by up to 40% after they were suspended. Capita, authorised corporate director of the funds, could not give a date for the publication of the report into valuations at December 2008 from accountants Moore Stephens. It previously delayed the report from October 2009 to 31 July this year.

‘The outcome of the 2008 audit is very important if you want to apportion blame,’ said a source close to the situation. ‘Moore Stephens are probably checking every sum in triplication because of this.’

Cardiff-based adviser Richard Gough of Castle Court Consulting has convinced the Financial Services Compensation Scheme (FSCS) to allow one of his clients to make a claim against Cru Investment Management, which is now in liquidation. The FSCS said investors had approached it with potential claims relating to Cru but until a valid claim was made, it would not be declared in default.