Following the Complaints Commissioner’s recommended findings this week, the regulator said it had no further comment to add after the publication of a 13 -page report following up a complaint from Patellis about its failure to regulate the Connaught Income Series 1 Fund, which led to the eventual collapse of mortgage lender Tiuta in 2012.
The FCA’s statement said: “The FCA Board will appoint an external third party to conduct a review into the regulation of firms connected with the Connaught Income Series 1 Fund. The substantive review will begin once the current enforcement investigation has ended. The FCA intends to publish the outcome of the review, to the extent that it can.”
The FCA also agreed to offer an ex gratia payment of £1,500 to Patellis and said it will write with a further apology.
Bridging lender Tiuta plc was placed into administration in September 2012 following a shortfall of approximately £20m found in its accounts in January 2011.
In May 2014, MPs called for a police investigation into the Tiuta and Connaught Income Fund scandal which caused investors to lose around £70m of their capital.
The All Party Parliamentary Group wanted police action over the misappropriation of funds and have demanded greater transparency from the Financial Conduct Authority over the responsibility for the failings.
Tiuta, a bridging lender was a partner company to the Connaught fund. In March 2011, Patellis blew the whistle on his own regulated company in an attempt to save investors’ money. The then Financial Services Authority failed to act promptly on his evidence of financial misappropriations at Tiuta.