The Financial Services Compensation Scheme (FSCS) has paid out to 40 victims of a Ponzi scheme run by a now-jailed adviser.
Alistair Greig, who ran Midas Financial Solutions, obtained over £13m ($15.9m, €14.6m) from investors and was jailed for 14 years for his part in a fraudulent investment scheme that scammed people out of their life savings.
In February 2020, the FSCS made victims aware they may be eligible for compensation.
The FSCS confirmed to International Adviser on 20 May that “to date, 40 claims have been successful” and it has “paid compensation totalling £2.3m”.
It added that “further claims are in progress”.
Update
In a 15 May update on its website, the FSCS said it has now passed claims relating to the Midas scheme to its assessment teams.
“We started paying compensation to victims from 1 May. We expect to complete all claims by the end of July 2020, subject to any extra information requirements,” it said in a statement.
The UK lifeboat scheme said previously that Midas Financial Solutions “owed a civil liability to investors of the illegal ‘Midas scheme’”.
Payment
The FSCS added that through its collaborative work with the Financial Conduct Authority (FCA), it has been possible to set up claims using FCA investor data.
“Where we received investor details from the FCA, those customers did not need to complete an online claims application,” the FSCS said.
“We have now contacted by mail all the customers passed to us by the FCA, confirming they are eligible to receive compensation.
“Some customers may have been told that they would receive their compensation by the end of April. Unfortunately, we were unable to complete payments by this date.
“We appreciate the patience of all customers with these claims and will compensate eligible customers as quickly as possible.”
Unhappy investors
However, not all investors in the scheme may be helped.
The FSCS said: “But it is possible that some investors in the illegal ‘Midas scheme’ were not known to FCA.
“So, their details will not have been passed on to us.”
Luxury
Midas, which was run by Greig and Ian Towe before it went bust in 2014, operated as an appointed representative of authorised firm Sense Network.
Investors were told by Midas that the investments carried “attractive guaranteed returns” placed on favourable terms due to the owner’s relationship with a well-known high street bank.
But the high-interest accounts never existed and, instead, investors’ money was placed into a “Ponzi scheme” operated by the owner of Midas.
While the money came in, Greig funded personal investments in property, including a holiday home in Cornwall, and a classic car business.
He treated himself to Bentley and Range Rover cars and spent money on trips to Old Trafford to see Manchester United and to Cheltenham and Ascot for horse racing meetings.
