Hector Sants is encouraging Arch cru investors to take the FSA-brokered 70% payment deal and has warned against attempts to get a better return through the Financial Ombudsman or the courts.
The FSA has said it believes the £54m package - struck this month with Capita Financial Managers as the authorised corporate director of the funds, and BNY Mellon Trust and Depository and HSBC as its depositories - represents a "good outcome" for investors.
However in a letter to one investor the FSA chief executive goes a step further and actively advises the individual to take the deal, even though the FSA is not expected to publish full details of the payment scheme until next month.
He writes: "I would therefore encourage you to accept the offer of payment from this payment scheme."
Investors have largely panned the offer which the FSA estimates will return 70% of their investment, but which critics say could provide closer to 50%.
Some plan to reject the deal and continue with claims against Capita through FOS, or if that fails, mount a legal challenge.
However elsewhere in the letter Sants warns investors off these courses of action, saying the FSA has weighed up their chance of success and found the 70% deal to be their "best outcome".
"We had to make a balanced judgement about what would be the best outcome for investors, including in this case assessing the probability of investors being able to achieve a better outcome through other means (such as going to the Financial Ombudsman Service, or personally suing any one or more of the three parties who contributed to the package).
"Our assessment was that the £54m was a good outcome...."
His comments seem to contradict the public line maintained by FOS that it assesses all complaints on a "case by case basis".
Gareth Fatchett, partner at Regulatory Legal which represents about 2,000 Arch cru investors said:
"The letter from Hector Sants gives no reasons at all why the FSA considers the deal as reasonable. Investors are furious at the cosy way the FSA are dealing with this."
He said investors want the deal reviewed "objectively".
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