Battle begins to win back £100m
SaverS who lost everything to dodgy investments sold by insurance giants are fighting back in a multi-million-pound law suit.
Two big-name British insurers are accused of sidestepping regulations to allow ordinary investors to plough their life savings into inappropriate high-stake funds.
Lawyers believe trusting victims lost more than £100 million to risky investments sold as insurance products by Friends Provident International and Old Mutual International.
Those who lost huge sums in the scandal say the insurers gave the investment funds an air of legitimacy. But in reality, they were unregulated and later collapsed — rendering people’s life savings worthless.
The risky funds were suggested to the novice investors by unregulated financial advisers who pocketed huge commission cheques.
Investors say they believed that because the insurers were British companies, their investments would be protected.
But because the investments were made via the Isle of Man, the Financial Conduct authority (FCa), Financial Ombudsman
Service and Financial Services Compensation Scheme (FSCS) have no power to act — and victims are not entitled to their money back.
Daniel Spendlove, partner at law firm Signature Litigation which has taken the case to the Isle of Man Court, says: ‘The insurers in this case consistently failed these investors — from structuring the products to conceal the true risk, through to failing to carry out enough due diligence on the high-risk funds.’
Sharon Huyshe, 62, lost more than £250,000 in the funds — wrecking her dream of a new life in Greece. The former graphic designer and her husband andrew, 65, invested money from the sale of their Sussex home in 2007.
But she says they were introduced to a rogue financial adviser who conned them into buying into the bonds with Skandia, which later became Old Mutual.
Sharon, who now lives in Hythe, Kent, says: ‘These are household names which we expected to be subject to the regulation. The money we invested was the achievement of a lifetime of our hard work.’
Lawyers estimate investors lost more than £100 million in the collapse of three risky funds — LM Managed Performance Fund, axiom Legal Financing Fund and the Premier new earth recycling Facilities Fund.
Investigation firm Coburn Corporate Intelligence (CCI) wants other investors who lost out to the funds to come forward.
Friends Provident International (FPI) denies wrongdoing or liability. a spokesman says: ‘FPI is not responsible for investment management or performance.’
Old Mutual International is now part of Quilter International, which said it will ‘robustly’ defend the claims. a spokesman says: ‘Quilter International does not provide advice in respect of any underlying investments, as that is the responsibility of the customer’s investment adviser.’ DID you lose out in this way? Then visit coburnci.com/omi-fpi/