The Financial Services Authority (FSA) has said it believes no-one may be responsible for Arch cru investors' losses.
In a letter dated 5 October seen by IFAonline, the regulator attempts to explain its endorsement of the controversial £54m payment scheme set up by Arch cru authorised corporate director Capita Financial Management, and the fund ranges' depositories, BNY Mellon Trusts and Depositories and HSBC.
Signed by Jon Gerty, solicitor for the regulator, the letter hints the FSA will be pursuing others - potentially IFAs - to provide redress beyond the 70% it has said the payment scheme will return to investors.
But in another twist in the scandal of the suspended fund range which once boasted £400m invested, but which has lost at least 40% in value, the FSA states no-one my be responsible for the millions lost by investors.
The letter reads: "...others (or even no-one) may be responsible for the losses suffered by investors, so 100% redress is not appropriate."
Gerty's letter is in response to demands from about 2,700 angry Arch cru investors for the FSA to justify its support for the payment scheme, and the subsequent restictions it has placed on the Financial Ombudsman Service to pay them redress.
In it, the FSA clears Capita of any legal responsibility for Arch cru investor losses.
It also confirms the regulator will not be taking any legal action against depositories of the Arch cru funds, BNY Mellon Trusts and Depositories or HSBC.
"I can confirm the FSA has made no determination that CFM is legally responsible for any investor losses," Gerty's letter states.
"I can also confirm that the FSA will not be taking any disciplinary action against either BNYM T&D or HSBC in relation to their role as depositories of the Funds."
Law firm Regulatoy Legal, which represents the group of 2,700, said the letter "narrows down" any potential judicial review challenge by investors.
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