The FCA is under fire over yet another scandal where savers lost £106m in Connaught fund but no one was charged

  • The Connaught Income Fund Series 1 fell into administration in 2012
  • Now the Connaught Action Group, which represents approximately 2,000 savers who lost money, has blasted the FCA for a string of alleged failings 
  • The row threatens to do fresh damage to the reputation of the regulator 

By Lucy White City Correspondent For The Daily Mail

Updated:

Victims of an investment fund which collapsed amid allegations of fraud have slammed the City watchdog

Victims of an investment fund which collapsed amid allegations of fraud have slammed the City watchdog

Victims of an investment fund which collapsed amid allegations of fraud have slammed the City watchdog for its handling of the scandal.

The Connaught Income Fund Series 1 fell into administration in 2012, losing savers £106 million.

No individual was ever charged with any wrongdoing, and the Financial Conduct Authority last month opened an investigation into its own handling of the affair.

Now the Connaught Action Group, which represents approximately 2,000 savers who lost money, has blasted the FCA for a string of alleged failings and claims its reviewer has conflicts of interest.

The row threatens to do fresh damage to the reputation of the regulator and its boss Andrew Bailey, who is widely seen as a leading contender to become governor of the Bank of England.

Mark Bishop, who leads the action group, said they want to meet with the FCA 'and directly address the question of compensation for regulatory failures'.

He added: 'We also need to understand why the supposedly independent reviewer was chosen, what – if any – conflict checks were undertaken and what they revealed, and if necessary agree the appointment of an alternative or additional reviewer.' 

Regulator's blunders

  • The Financial Conduct Authority is under pressure to reform investment rules after savers were frozen out of the Woodford Equity Income fund.
  • Regulators failed to stop an alleged fraud at London Capital & Finance.
  • Failed to act against senior bankers over toxic behaviour at a Royal Bank of Scotland business rescue unit in the wake of the financial crisis.
  • The FCA has still not completed a report on claims of wrongdoing by bosses of collapsed bank HBOS – more than a decade since it failed.

Bishop, 50, has launched a formal complaint against Bailey and the FCA's chairman Charles Randell. There are also questions over the appointment of Raj Parker, a barrister at Matrix Chambers, to lead the independent review.

Parker spent more than 30 years at City law firm Freshfields Bruckhaus Deringer, working in areas including financial services.

At the same time, Nausicaa Delfas was specialising in financial services at Freshfields. She now works for the FCA, where she is understood to have overseen the department which is being probed because it originally looked into problems at Connaught. 

It is unknown whether Parker and Delfas were acquainted through work, but Bishop is concerned about their shared history.

The group wants the FCA to set up a £100 million fund for victims.

An FCA spokesman said: 'We are satisfied that the terms of reference will enable the independent reviewer to identify any failings in the supervision of Connaught, and that he has no conflict of interest.' 

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