An announcement from the Financial Services
Compensation Scheme (FSCS) has been made.
This gives the go-ahead for those who made an investment in property developers Arck LLP to claim compensation against the independent financial advisor (IFA) who recommended this scheme to them.
The news comes after a lengthy investigation by the FSCS, which was awaiting the result of a separate enquiry run by the Serious Fraud Office (SFO) and the East Midlands’ Special Operations Unit.
Arck LLP Fraud
Arck LLP sold overseas land to individuals, with the company agreeing to buy it back after a specified period of time. An estimated 750 people have been caught up in the Arck LLP fraud case, often using their pension pot to finance the venture. The SFO puts the total of monies invested as close to £50 million.
Following the investigations, what was first thought to be an overly-complex Arck investment scheme was found to be nothing more than an intricate scam by the SFO. The Arck LLP fraud case has seen the company go into liquidation, and former partners Richard Clay and Kathryn Clark were ordered by the courts in June 2016 to pay over £550K between them to the treasury. Clay also received a directorship ban for 15 years for his part in the Arck fraud case, with Clark banned for 14 years.
Richard Clay has also been sentenced to a 10 year, 10 month prison after pleading guilty to five charges; three of fraud and two forgery.
Arck LLP are now in liquidation.
Bad Financial Advice Regarding Arck LLP
The majority of the money invested in Arck LLP has stemmed from the advice of IFAs, many of whom were unregulated by the Financial Services Authority. Given the nature of the Arck fraud, the FSCS has deemed the advice given was not in the best interests of the individuals who received it, going against regulations that are in place to ensure suitable advice.
The Yorkshire Bank has also been involved in the investment issue, with Arck LLP having banked at the establishment. Yorkshire Bank has advised it will pursue any financial advisors who sold the Arck LLP scheme to individuals, should those people attempt to claim compensation from the bank itself. There is no suggestion that Yorkshire Bank were in any way affiliated with or implicated in the Arck investment fraud and they have set up a scheme to support Arck investors caught up in the scandal.
Arck Mis-sold Investments
The Arck LLP saga is an important contribution to the rise in pension reviews turning into investment mis-sales. A considerable proportion of the £50 million invested in Arck LLP is thought to have come from pension pots, with savings and home-remortgaging also targeted.
Ultimately, poor advice has been given by IFAs, with promised returns to Arck investors being non-existent.
“We are glad that the FSCS has decided to give the go ahead to this review. Sadly we see these sorts of scams on a regular basis and we anticipate there being more in future, particularly since the pensions freedoms came in. We can assist clients who find themselves in the unfortunate position of being victim of this sort of thing.”
Peter McKenna, Partner
If you made an Arck investment and have lost out financially, TLW Solicitors are here to help on a no-win, no-fee basis.
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