The Financial Services Compensation Scheme (FSCS) has paid out £3m in claims related to collapsed advisory firm Bentley-Leek Financial Management (BLFM), which had advised clients to invest in failed overseas property schemes that it was also in charge of.
The FSCS officially declared the IFA in default in June after which it received 262 claims over losses.
The scheme said it has so far made 87 decisions and made offers on 70.
More than 300 customers lost money after investing a combined £35m in failed property vehicle Bentley-Leek Properties, which invested in property developments in the UK, Dubai, Canada and Zanzibar, between 5 March 2004 and 23 November 2010.
Two BLFM directors, Mark Bentley-Leek and Mustafa Dervish, were fined and banned by the Financial Conduct Authority (FCA) in October for misleading investors to invest in the schemes that they were also in charge of.
The FCA found the pair had failed to tell their clients of their personal interests in the schemes and had also continued to advise on the investments after clients had already lost money in them.
It found that despite the riskiness of the investments, the directors told some of their clients that their money, and a 6%-18% return on the investment, was guaranteed. Some investors were told that returns of up to 50% could be expected, the regulator alleged.
The FCA said that most investors who invested during this period are likely to suffer substantial losses.
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