Fees fury of failed fund firm hit by US scandal

FeWer than ten customers will be forced to cough up costs of the insolvency for a failed investment firm.

Clients of broker beaufort Securities had invested £550m in the stock market, before it failed following an FbI money laundering investigation into senior staff.

PwC is tasked with winding up beaufort and has warned that returning the cash to its rightful owners could cost as much as £55m. This money will be passed on to other firms involved in the administration, as well as some for PWC’s own fees.

Investors were horrified to learn that uK rules mean they would be forced to foot this bill, triggering an angry backlash from families fearful of losing their savings.

The fees sparked fury because the savers with money at risk have done nothing wrong, there are no claims that their money is missing and they never bought equity in beaufort or lent it cash.

Small shareholder group Share Soc launched a campaign to cut the losses faced by beaufort’s customers. Following the backlash, PwC has said that virtually all the fees will be paid for through the Financial Services Compensation Scheme.

Around 94pc of the total bill for returning the money to beaufort’s 17,500 clients will come from the FSCS, which is funded by banks and other finance firms. The remaining 6pc will be paid by corporate clients. The bill will include legal and other costs, with PwC’s fees likely to be a minority of the overall figure.