Complaint letters from over 1,300 investors in the CF Arch Cru fund range will this week be sent to Capita asking for the firm to refund their original investment plus interest.
This week’s Money Marketing, Fund Strategy’s sister publication, reveals that the deluge of complaints has been organised in association with 128 IFA firms advising the 1,312 investors, and law firm Regulatory Legal.
The investors claim that, as authorised corporate director (ACD), Capita is responsible for the losses suffered.
The £363m fund range was suspended by Capita in March 2009 owing to liquidity concerns caused by redemption requests. The value of the fund range dropped by £140m between March 13, 2009, when it was suspended, and September 30, 2009.
The complaints, which are all similar in nature, claim investors acquired the units on the back of inaccurate and misleading information and call for Capita to repay the original investment with interest. The investors also want Capita to take full ownership of the units.
If the complaints are not resolved satisfactorily within eight weeks, they will be sent to the Financial Ombudsman Service. Each complaint would cost Capita a £500 complaint fee, totalling over £600,000, unless it was decided the complaints were frivolous or vexatious.
Capita set aside a £30m provision for potential losses in March 2010 following the suspension of the fund range. (article continues below)
Gareth Fatchett, Regulatory Legal partner, says: “We can confirm that we have notified Capita’s lawyers of around 1,300 complaints to be issued against them. We expect this figure to rise to around 2,000 over the next month.”
A Capita spokeswoman says Regulatory Legal’s actions reflect an over-simplification and misunderstanding of the issues involved.
She says: “As investors are aware, we are undertaking a review to assess whether investors in the funds have suffered detriment beyond that caused by extreme economic conditions and to what extent the various parties involved should be responsible for any compensation.
“It is unclear why Regulatory Legal believes that it will assist its clients to try to pre-empt that process.”