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Investments were mis-sold to hundreds of customers of Arck

Three investments in off-plan property firm Arck were too high risk and complex for a client, the Financial Ombudsman Service (FOS) has ruled.

Arck – which involved a second party buying a plot from Arck and then Arck undertaking to buy it back after a certain period – was “an unusual and complex arrangement” that was “unlikely to be easily understood by anyone other than a sophisticated investor”, the FOS said. The ruling may pave the way for other Arck investors to claim they received poor advice.

Arck used advisers to market unregulated property development investments in locations such as Cape Verde, offering high returns with no risk to capital, to approximately 700 investors between 2006 and 2011.It lost around £45m of investors’ money, with investors seeing little or no returns, and entered liquidation last March.

The final decision from the FOS states that the financial adviser did not adequately assess the risk associated with Arck. If the firm had, it would have realised it was unsuitable for the client.

The financial advisers argued the client’s loss was due to fraud at Arck, which is being investigated by the Serious Fraud Office, and were not its fault. But the FOS said while “no liability will arise for an adviser who has given suitable advice even if the investment is later fraudulently managed”, the position is different where the consumer would not have been in the investment in the first place had it not been for unsuitable advice.


TLW have an experienced financial mis-selling team who are currently dealing with numerous cases of mis-sold investments where clients have lost out due to poor investment advice.

As well as dealing with overseas property investments in places such as Cape Verde we have also assisted those who have lost money by investing in other property developments, carbon credits, green oil, wine stocks and store pods.