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November 28, 2007 |
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BFS INVESTMENTS: FSCS Declares Firm in Default The Financial Services Compensation Scheme has declared BFS Investments Plc in default. The declaration means that customers who have lost money can now make a claim against the firm in respect of BFS split capital investment trusts. FSCS has declared BFS in default because it is satisfied that the firm is unable, or likely to be unable, to pay compensation claims against it. Declaring the company in default follows extensive inquiries by FSCS into the BFS funds and potential bases of claims. Determining what liabilities BFS may have incurred to investors who invested in its funds at various points in time is complicated. FSCS has taken expert advice and has discussed its approach with relevant trade organizations. FSCS expects to deal with claims against BFS in relation to: -- the individual trusts it managed; -- its role as an execution-only portfolio manager, where the marketing materials it used to promote its investment trusts may have wrongly described the risks associated with those investment trusts; and -- its role as a discretionary portfolio manager, where it could have misled its customers by holding investments within its portfolios that were unsuitable for their risk levels. "Declaring BFS Investments Plc in default means that we are now ready to consider claims from investors who may have lost money as a result of investing in certain BFS split capital investment trusts," FSCS Chief Executive, Loretta Minghella said. "We are aiming to deal with these claims as quickly as possible. Some straightforward claims may be completed in a matter of weeks while the more complicated ones are likely to take longer. We plan to complete the bulk of them within the next nine months. About BFS Investments BFS Investments plc -- http://www.bfsinvest.co.uk/ -- is a fund management firm that used to operate in the split capital trust industry. BFS Creditors confirmed the company's voluntary liquidation after members passed a resolution to wind up the company's operations on Feb. 10, 2006. |
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