London Capital Group, an online trading platform, has paid out £1.2m to investors who invested via the failed Integrity product over losses linked to commission rebating of the fund in the first half of 2009.
In a statement to the London Stock Exchange, London Capital Group - the online trading company which is not to be confused with independent wealth management group London & Capital - said during the second half of 2012 the group made a settlement offer to outstanding Financial Ombudsman Service (FOS) complainants, of which 26% accepted.
This led to a net payment of £1.2m and the release of £0.7m of the provision made.
In today's stock exchange statement, London Capital Group said: "During the first half of 2009 the group made commission rebating errors while preparing the customer statements of a managed FX fund.
"The correction of these errors led to a series of complaints to the FOS. While the group believes its actions did not directly cause any loss to the clients, the assessment from the FOS determined that the group should repay the total losses incurred by the clients plus interest."
The group also said it had made a provision for further FOS complaints of £3.6m, up from £3.2m in 2011, and said there remains "significant uncertainty as to the eventual financial outcome due to the ongoing FOS and court process".
Legal costs in relation to the group's legal and FOS claims reduced by 29% to £0.5m last year, down from £0.7m in 2011. The group said it does not anticipate these costs decreasing in 2013.
In addition, the group received a claim served against its subsidiary London Capital Group Limited in relation to the termination of a fee sharing agreement with Integrity Financial Solutions Limited, the company that introduced clients to the managed FX fund.
The group said on the basis of legal advice received it views the claim as "speculative and without merit", and no provision has been made in relation to the matter.
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