A group of investors in the £6m Keydata International fund have lodged a complaint with the Isle of Man financial ombudsman against the fund's administrator, Blue Sea International.
Blue Sea confirmed in February the fund is heavily contaminated with bonds from SLS Capital, which misappropriated about £103m from 5,000 investors, and is the subject of a Serious Fraud Office (SFO) investigation.
Investors fear Keydata International bought over £2.5m of worthless assets from SLS.
The International fund was set up in April 2009 by Keydata founder Stewart Ford and director Mark Owen, to buy second-hand life settlement units from customers of Keydata-backer Lifemark, who wanted to cash in their investments.
Money raised from the sale of Keydata bonds was invested in Luxembourg-based SLS Capital and Lifemark despite directors knowing of a problem with SLS since October 2008, when it stopped making income payments to Keydata UK products.
The International fund was promoted as an offshoot of Keydata UK and had the same directors with staff working from the UK offices.
Estimates suggest the SLS contamination of Keydata International is between 60% and 70%.
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