Zurich IFA (ZIFA) has agreed to pay a UK-based intermediary £330,000 as part of the compensation a j...
Zurich IFA (ZIFA) has agreed to pay a UK-based intermediary £330,000 as part of the compensation a judge ordered her to provide a client for the sale of the infamous Imperial Consolidated Alpha Plus fund.
Despite agreeing to pay 66% of the total compensation bill of £500,000, ZIFA said it was not accepting any liability over the sale of the Bahamas-based Alpha Plus fund through its offshore bond by Swindon-based adviser Caroline Ockwell & Co to Mr and Mrs Seymour. ZIFA argued that the judge, Sir Mark Havelock-Allan QC, stated that the case should not act as a precedent for any potential class action by investors.
In a statement, ZIFA said: "The judge confirmed there is no liability between the product provider and the client and responsibility for advice ultimately lies with the financial adviser. However, it is purely the unique nature of this case that has resulted in Zurich's financial contribution to the IFA's losses.
"The judge made the express statement that this does not set a precedent for other cases with different facts."
ZIFA said that, in this case, it accepted that its sales consultant may have mis-represented the Alpha Plus fund to the intermediary. Therefore, the company argued, each case would have to be examined on its merits to see if consultants had mis-represented the fund to other advisers.
International Investment reported in the June issue that Mazars, which was appointed administrator to Imperial Consolidated on 10 June 2002, was cautious about this case setting a precedent for a class action. It said: "There are certain facts in the case that 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 their claims."
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