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SFO Arck probe turns spotlight on advisers

SFO Arck probe turns spotlight on advisers

The Serious Fraud Office (SFO) has appealed to investors for information on the advisers who sold them failed property investment Arck LLP.

The SFO has requested Arck investors fill in a questionnaire which asks them whether they were recommended the scheme by an adviser, and if so to name the adviser.

The SFO has also asked investors if they were given any information about the level of risk associated with the investment and who by.

The organisation has also requested financial advisers with clients invested in Arck products get in touch to submit a separate questionnaire.

It added that the Financial Services Authority (FSA) was also interested in matters arising from its 'Project Bijou' investigation into Arck and said information provided may also be passed onto the regulator.

Around 750 investors could stand to lose around £60 million from the Arck investments, which were intended to produce a return secured against a plot of land with planning permission.

Arck, which is currently in liquidation after Butcher Woods and Rendle & Co were appointed as joint liquidators in June, has been embroiled in investigations, arrests and regulatory action over the past year.

The SFO was alerted to Arck in March and opened an investigation in May.

In March, Kathryn Clark, managing director of Arck LLP was arrested by Nottinghamshire Police on suspicion of fraud by false representation and money laundering. Richard Clay, Arck’s other managing director was also arrested.

According to the FSA Clark appeared to have received, circulated or been involved in the provision of forged bank statements purporting to relate to the Arck General Client account at Yorkshire Bank.

In November, the FSA publicly censured and banned Michele King, a partner at Sipp firm HD Administrators. Around £1.3 million was invested in Arck through the HD Administrators Sipp with a further £4.5 million invested through the firm but not through a pension.

Clark was also a director of HD Administrators.

In March, the FSA removed the permissions of HD Administrators after Clark’s arrest and said Clark and fellow director King did not appear to be fit and proper.

According to the FSA, King who was also administrator for the HD Sipp, told the regulator she was unaware she was approved to perform a controlled function at the firm. The FSA said she also could not adequately explain how a Sipp operated.

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