Thousands of investors have rejected compensation offer over failed funds.An estimated 2000 private investors have rejected the Capita offer over the failure of Arch cru funds.
The offer closed at mid-night on New Year, leaving litigation as the only route left open for those seeking compensation from Capita.
Capita’s offer of roughly 15p in the pound was considered ‘derisory’ by 800 investors who are already pursuing their claim through City solicitors Harcus Sinclair.
Now the Arch cru Litigation Committee representing them are appealing to others to join the action saying: “You have nothing to lose but everything to gain.”
In November last year a Group Litigation Order was granted by the High Court to investors seeking redress from Capita Financial Managers Ltd, the authorised corporate director of the CF Arch cru Investment Funds and CF Arch cru Diversified Funds.
The Arch cru investments were sold to around 20,000 small investors as low to medium risk, through FSA regulated funds, using complex offshore structures which hid the fact that investors’ money was placed in highly risky, illiquid private equity and other schemes.
John Hawkes, Chairman of the Committee of the Arch cru litigation group, said: “Arch cru is one of the financial scandals of our time. The FSA censured Capita Financial Managers for its involvement in the scheme, whereupon they cleverly made a low settlement offer which many ordinary hard-working people have been forced to accept because they could not afford to take the risk of suing for proper compensation .”
The owners of over £50 million of invested funds have not accepted Capita’s offer. These investors will be able to sign up to the litigation until the end of March this year at no risk or cost to themselves.
Arch cru Litigation Committee is a steering group appointed to represent the interests of investors in Arch cru funds who are suing Capita Financial Managers, as Operational Director of the funds, for compensation following catastrophic losses to the investment.
Around 800 investors are taking legal action against Capita FM. They are represented by Damon Parker, head of litigation as solicitors Harcus Sinclair of 3, Lincoln’s Inn Fields, London WC2A 3AA.
A Group Litigation Order was granted by the High Court in November enabling Harcus Sinclair to contact all 20,000 investors whose funds were invested in Arch cru and who have suffered loss.
Capita FM has made a no-fault offer of compensation to investors amounting to 15 per cent of funds invested plus interest. A deadline has been set at December 31, 2013 to join the scheme.
Arch cru Litigation Committee believes this offer to be inadequate compensation. It estimates that investors who go to court will achieve around 70 per cent of their investment net of court costs if their action succeeds.
The legal action against Capita FM is being funding by a litigation fund. As a result investors are not required to make any up front payment for court costs that will be deducted from any award made by the courts.
The investors’ case against Capita FM is that it failed to exercise proper control of the funds in which their money was invested by allowing them to be invested in high-risk private equity funds that were not a declared class of asset.