The independent review into the Connaught Income Fund Series 1 collapse has invited affected investors to get in touch.
The review, launched in June, was set-up to establish the lessons the financial watchdog could learn from its handling of the Connaught Income Fund Series 1 saga which saw investors pour £118m into the fund before it fell into administration.
Barrister and part-time judge Raj Parker is leading the review and has requested people affected share their experiences. The deadline for responses is 8 November. He said all responses should be limited to the "matters which fall within the scope of the review".
The review, set up by the Financial Conduct Authority (FCA), covers the period from 1 February 2007 to 10 March 2015.
It aims to answer four principal questions:
1) Whether the then-regulator the Financial Services Authority's (FSA) regulation of Tiuta Plc, Capita and Blue Gate, and the individuals associated with these entities, and its response to intelligence was appropriate and effective;
2) Whether the FSA's jurisdiction at the time impacted its ability to meet its statutory objective of protecting consumers;
3) Whether the approach to communications with investors was appropriate, timely and transparent; and
4) Whether the FCA's decisions to support negotiations in July 2014, and then subsequently to withdraw that support in March 2015 were appropriate
What was Connaught?
The Connaught fund was an unregulated collective investment scheme (UCIS) that started operating in March 2008, providing short-term bridging finance to commercial operators in the UK property market.
CFM was the operator of the fund until it resigned on 25 September 2009. Investors poured £118m into the Connaught fund before it entered administration in September 2012 after the collapse of its Income Series 1,2 and 3 UCIS products.
FCA investigations have been focused on management firms Capita Financial and Blue Gate Capital, which respectively managed the fund between April 2008 to September 2009, and September 2009 to December 2012.
A settlement between the liquidators and Capita was reached in July 2015, as a result of the talks facilitated by the FCA, which saw investors retrieve some losses.
In July last year, the FCA announced a third-party investigation into the collapse of the fund and CFM, in relation to its conduct as operator of the failed investment. CFM set aside £37m ahead of the investigation.
The regulator found CFM failed to conduct adequate due diligence on the fund, as well as ensuring the replacement operator was fully informed of the issues that had arisen. The FCA said CFM also failed to communicate with investors in a way that was clear, fair and not misleading.
Normally, this would have resulted in a penalty on the firm but the FCA acknowledged CFM would not be able to pay back £66m to investors if a penalty was also issued.
Staff are your responsibility
More than 4,500 retail investors affected
Paid out £54m in related compensation
Changes to take place by next year