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Redress deadline extended for investors in Tiuta-funder Connaught

by: Scott Sinclair
  • 05/11/2014
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Redress deadline extended for investors in Tiuta-funder Connaught
The Financial Conduct Authority (FCA) has extended its support for a 'negotiated settlement' for investors in the failed Connaught Series 1 fund, the funding line for defunct bridging lending Tiuta.

The regulator has extended its support from October until January next year.

It said it continued to believe a negotiated deal to address investor losses is in investors’ best interests.

Connaught entered administration in September 2012 after the collapse of its Income Series 1,2 and 3 unregulated collective investment schemes (UCIS), which provided credit lines to stricken bridging lender Tuita, a firm that also went into administration in September 2012. About £118m was invested in the scheme.

The parties the FCA are trying to broker a deal with are likely to be the administrators of Connaught Asset Management and Tuita, the fund’s operator Blue Gate Capital, investors represented by the Connaught Action Group and major creditor HMRC.

“We are working closely with interested parties and our current view is that it is still in the interests of investors for the FCA to continue to support these negotiations with a view to obtaining appropriate redress for them,” the FCA said in a statement.

Connaught was the subject of an Financial Services Authority warning shortly before the suspension of the Series 1 fund in March 2012, which said Connaught had misled investors over the risk levels in investing in bridging loans.

“In the literature we have seen, the Connaught funds are described as ‘very low risk’ and ‘low risk’,” the FSA notice read. “It makes comparisons between investing in them and putting your money in high street bank and building society accounts. We believe this is misleading.”

 

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