The Financial Services Compensation Scheme (FSCS) has begun paying out the claims of investors who put money into contracts for difference (CfD) with trader Direct Sharedeal.
The FSCS started accepting claims from Direct Sharedeal customer last May, although it remains unclear whether the compensation burden will ultimately fall upon financial advisers as part of their levy.
The Glasgow-based stockbroker entered administration in 2011 after alleged mismanagement of high risk CfD investments, with many investors claiming that their accounts were overtraded leading to substantial losses.
A report by the joint administrators of the firm, Finn Associates, last year suggested claims could potentially reach up to £13m.
Regulatory Legal, a law firm which acts on behalf of some Direct Sharedeal investors, said the crucial point of the one successful FSCS application it has so far received was that the investor was able to provide evidence of all of the trades on their Direct Sharedeal account, proving that the account had been overtraded.
The law firm said it is "imperative" that investors use all means available to them to obtain copies of their full trading account from the date they invested into Direct Sharedeal to the date their account closed or suspended.
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