The Financial Conduct Authority (FCA) has been trying to reach a ‘negotiated settlement’ for investors between the liquidator of the Connaught Series 1 fund and its former operators, Capita Financial Managers and Blue Gate Capital.
Investors are represented by the Connaught Action Group and major creditor HMRC.
But a resolution has yet to be reached. The FCA has said talks are continuing and that it will provide an update by the first week of March, or sooner “if circumstances allow”.
Last November the regulator extended its support for the process until January this year, longer than its initial deadline of 31 October 2014, because, it said, a deal between the parties is in investors’ best interests.
Investors have been in limbo about whether they would get any of their money back since the unregulated collective investment scheme (UCIS) collapsed in 2012.
Connaught entered administration in September that year after the failure of its Income Series 1,2 and 3, 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.
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.”