judge rules ZIFA and Caroline Ockwell should compensate after fund collapse
Zurich IFA (ZIFA) is considering whether to appeal against having to share a £500,000 compensation bill with a UK-based financial adviser over the sale of the infamous Imperial Consolidated Alpha Plus fund through an offshore bond.
In response to the judgement in the Seymour vs Ockwell vs ZIFA High Court case, Zurich said: "We are considering the detail of the judge's comments and the merits of any appeal. Until this process has concluded, we cannot comment in detail on the case or our response."
It has been reported that the judge, Sir Mark Havelock-Allan QC, ruled that ZIFA and Swindon-based IFA Caroline Ockwell & Co should pay the husband and wife client the £500,000 they invested in the Bahamas-based fund. According to reports, the judge said ZIFA had inaccurately said the fund was low risk and had not carried out sufficient due diligence.
But this may not lead to a flood of other cases. Mazars, which was appointed administrators to Imperial Consolidated on 10 June 2002, said: "There are certain facts in the case which will mean the judgement does not necessarily apply to many of the investors but which could establish a precedent for some to be able to pursue claims.
"The joint administrators/liquidators of the group are meeting with their lawyers to review the factual details and the possibility of being able to assist investors with similar claims. It is too early to say what is the likely result of those discussions but further news will be posted as soon as possible."
The Imperial Consolidated Alpha Plus fund, in which a total of more than £200m was invested, collapsed in 2002 amid allegations of fraud. Mazars has so far made claims to assets totalling £36.96m.
Mazars also said it has made a claim against Rob Raven, Mrs JM Raven and Alternative Investment Strategies (which was owned by Raven). This claim is proceeding through the High Court and has been brought on three grounds. Mazars said: "Given the integral role Mr Raven played in the Imperial Group and the conclusion that the Imperial Group was operating a fraudulent Ponzi Scheme, damages of up to $101.1m are being claimed (being the losses sustained by the claimant companies).
"Secondly, it can be demonstrated that Mr Raven, Mrs Raven and AIS between them received $5.8m from the Imperial Group and therefore a proprietary claim is being made in respect of this sum. "Thirdly, while Mr Raven was a director of Imperial Consolidated Limited, certain payments totalling in the region of $14m were made at a time when the company was insolvent and therefore damages in this sum are being sought from Mr Raven for breach of his fiduciary duties."
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