Up to 400 former customers of failed derivatives broker Global Trade Europe (GTE) are set for compensation payouts.
The Financial Services Compensation Scheme (FSCS) says it is in discussions with the firm's liquidators to assess the value of potential payouts to affected customers, adding it has already received 85 claims against the company.
Under FSCS rules, payouts can not exceed £48,000.
GTE was placed in administration in February last year after an unnamed client sustained heavy losses. It does not have the money to pay claims against it.
The firm's principal business was the provision of Contracts for Difference and spread trading services to clients. The liquidators believe some 400 investors could have claims against the firm for the return of cash balances held.
At the time of GTE's demise, the FSA came under heavy fire for allowing the broker to carry on writing new business for five weeks after it was first informed by GTE that it was facing a shortfall of regulatory capital.
"Help is on the way for customers," FSCS chief executive Loretta Minghella says. "We are working closely with the liquidators, and hope to make the first payments to customers of the firm shortly."
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