The statement was in response to an FCA final note, published on 19 May, which highlighted claims made by Strabens Hall that it was facing insolvency after racking up £1.05m ($1.4m, €1.3m) of liabilities to eight customers who complained to the Financial Ombudsman Service (FOS) about advice to invest in the unregulated Connaught Income Series 1 Fund.
A spokesperson for the company, which has offices in London and Hong Kong, told International Adviser on Monday that a settlement with its professional indemnity (PI) insurer for an undisclosed sum means Strabens Hall can “satisfactorily resolve” the liabilities in question.
FCA “aware” of deal
Strabens Hall said the FCA was “fully aware” of the changes to its status when it issued its “redacted” refusal to authorise a new business, Independent Family Advisers (IFAL), set up by the firm’s directors Adam Benskin and John Halley.
The firm said the FCA note had only covered a “phase of interaction” between the firm and the regulator from September 2013 to the end of February 2015.
“There have been significant developments in the period since then and Strabens Hall is able to confirm that these include the successful conclusion of the dispute with its professional indemnity insurer on a satisfactory basis for all parties concerned,” Strabens Hall said in its statement.
It is now “trading normally” and “meeting its full legal and financial” obligations, the company said.
When contacted by International Adviser, an FCA spokesperson said that although the regulator does not comment on individual cases, all firms are given access to any notices before they are published so that they can “make representations” about any issues or changes of circumstance.
‘Phoenixing’
In a scathing judgement, the FCA had accused Benskin and Hally of ‘phoenixing’ – an administrative ploy of setting up a new entity to allow company directors to escape personally footing the bill for a failed firm’s liabilities.
In its application, IFAL requested permission to buy the advisory firm – including its assets, staff and clients – so it could pursue an ongoing legal dispute with its PI insurer.
“We wish to make clear that the sole purpose of seeking regulated status for IFAL was to ensure that Strabens Hall would be in a position to protect the best interests of all its clients including the small number involved in the investments in question covered by the notice,” said Strabens Hall.
Although contacted for comment, at the time of publication the FCA had not responded.
