A group of 700 investors who lost millions in Keydata backer SLS Capital are sending their IFAs to meet lawyers raising a case against the fund's supervisors.
The group lost a total of £80m in SLS Capital which is the subject of a Serious Fraud Office (SFO) investigation after £103m was misapproprated from 5,000 investors
All of the investors, led by businessman Tony Lahert, have more than the £48,000 FSCS compensation limit tied up in SLS. Lahert himself has his £250,000 retirement pot in the failed firm.
Enyo, the London law firm acting on behalf of the investors, will not seek compensation from advisers for unsuitable advice, according to a source close to the situation.
Instead, it will look at negligence on the part of firms tasked with supervising and auditing SLS, including Big Four accountancy firm PricewaterhouseCoopers (PwC).
PwC, which was auditor for SLS during the time the £103m was misappropriated, was appointed as administrator in June 2009 until June 2011.
The accountancy firm is also responsible for the administration and winding down of Keydata, which sold SLS-backed bonds through IFAs in the UK.
As of 8 October, the FSCS has paid out more than £50m to about 4,700 SLS investors, the majority of whom had purchased investments promoted as ISAs that were not in fact eligible for tax-free ISA status.
However, non-ISA SLS investors in Secure Income Bond (SIB) 1, 2 and 3 have had to apply individually to the FSCS for compensation and many have been rejected on a 'legal technicality'.
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November