News

FSA proposes collective settlement on splits

by Compliance Monitor and Deloitte & Touche Governance and Regulation

The heads of 21 firms that are under investigation for activities in the split capital investment trusts sector met John Tiner, FSA chief executive on 2 March for a progress update. In the course of inquiries into allegations of collusion by fund managers, mis-selling by intermediaries and publication and distribution of misleading marketing material, 60 FSA staff have studied, inter alia, prospectuses and promotions, restructurings and new issues in 2002-02, cash audit trails and related stock transactions. They have made 17 site visits, interviewed more than 70 individuals, reviewed 780 files and listened to 27,000 taped conversations and the work is not over yet. After presenting some of its initial findings to the assembled chairmen and chief executives, the FSA proposed collective settlement negotiations to ensure that investors are appropriately compensated and offending parties disciplined. Individuals already under investigation will have their cases considered separately. The regulator has given firms until 16 March to decide if they wish to join the settlement discussions.