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Hopes for further Arch Cru payout dashed

by Daniel Grote on Jan 02, 2013 at 08:11

Hopes for further Arch Cru payout dashed

The Guernsey government has downplayed hopes for a further compensation payout for Arch Cru investors, suggesting the Financial Services Authority (FSA) is not on board with efforts to forge a settlement between the parties involved in the funds.

Guernsey minister of commerce and employment has said that it would be ‘difficult’ to achieve a settlement unless there was agreement from both the UK and Guernsey, The Times has reported.

Stewart met with economic secretary to the Treasury Sajid Javid last month for talks on a settlement, which would be in addition to the two compensation schemes already announced by the FSA. Investors in the funds are able to reclaim money lost through a £54 million scheme funded by Capita, authorised corporate director of the funds, and depositories BNY Mellon and HSBC, and a further scheme to be funded by advisers found to have mis-sold the funds.

Stewart has supported a settlement encompassing parties that came under Guernsey regulation as well as the UK. The cells in which the Arch Cru funds predominantly invested were based in Guernsey.

According to The Times, no further meetings with the Treasury for talks on a settlement are scheduled, although Stewart is set to meet Tory backbencher Alun Cairns, head of the all party parliamentary group on Cru, who has championed a deal.

Stewart would not confirm to the paper whether the Guernsey Financial Services Commission supported a deal, but added it was ‘undertaking its own regulatory investigations, and these are ongoing’.

9 comments so far. Why not have your say?

Man in Black

Jan 02, 2013 at 08:30

I may have missed it, but weren't Messrs Farrell and Maguire given knighthoods for their role in this affair? Or am I getting confused with other failures?

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Michael Brown

Jan 02, 2013 at 09:31

MIB

Probably right as failure is rewareded in this life it seems!

I do wish that we could start the new year with the correct info. The "Further Scheme" failes to mention the poison that all the other IFA's are being forced to swallow.

Still perhaps my Christmas fairy will be right in that we will get a refund, but then I do dream more these days.

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Ned K

Jan 02, 2013 at 09:48

Many of the recent financial scandals have links to Guernsey, so as part of our due diligence process we do not recommend Guernsey based funds, the risk is too great.

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Julian Stevens

Jan 02, 2013 at 10:22

"funded by advisers found to have mis-sold the funds". Correction ~ funded by advisers decreed unilaterally by the FSA (with no admission of its own failings) to have mis-sold the funds.

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James Clancy

Jan 02, 2013 at 13:25

Why hasn't this government got the balls to tell Capita they don't compensate investors involving Arch Cru they will not get any more contracts.

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Lyndon Edwards

Jan 02, 2013 at 14:23

@James Clancy

Why havent advisers got the sphericals to move their clients out of all CF funds?

It's obvious why the civil servants, Treasury etc., won't attack Capita. Can you imagine the howls of protest when Capita 'accidentally' had a computer glitch and no-one was paid. . . . Capita has contracts for nearly all the public ervices and local authorities, police pensions etc. The atmosphere between police and government alone is poisonous enough at the moment without giving any hostages to fortune.

There is more dirt to come out about cru; the truth can't be hidden for ever.

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John Borgars

Jan 02, 2013 at 14:24

@ James Clancy

Because the current government has more concern for the law than its predecessor

Capita was set up to supply services to elected local authorities, not to central government, and that is still the largest part of its business. The division of Capita partly responsible for the Arch Cru debacle works for the private sector.

The government *cannot* stop Capita getting any more contracts unless it starts behaving like a totalitarian dictatorship.

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Bob Donaldson

Jan 02, 2013 at 17:27

@James Clancy - More dirt may well come out but most of us will be long dead or out of the business!

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Alan Smith

Jan 03, 2013 at 09:38

The Guernsey government has downplayed hopes for a further compensation payout for Arch Cru investors, suggesting the Financial Services Authority (FSA) is not on board with efforts to forge a settlement between the parties involved in the funds.

Of course the FSA are not on board, it has been the FSA's intention to manipulate this scandal so that the bill for compensation fell onto the FSCS and avoid having to admit the harsh realities of why these funds failed, and the implications that the failures could have on a number of other funds still being happily marketed to the retail investor.

The FSA's manipulation has caused several IFA firms to fold already and the S404 redress scheme will close a few more, the vast majority of the compensation, which will exceed £150 million, will come from advisers who did not advice on Arch Cru via the hike in their FSCS levy.

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