The Financial Services Compensation Scheme also said self-invested personal pension (SIPP) provider HD Administrators LLP, which went into liquidation in June 2014, is liable for losses in relation to Arck investment schemes held in the HD SIPP.
The body said this is “due to [HD’s] responsibility as a SIPP operator”.
Estrela Santiago, Paradise Beach and Joyston, are just a few examples of the Arck schemes investing in holiday properties.
The unregulated property investments offered high returns, with no risk to capital, to about 700 investors between 2006 and 2011.
Criminal convictions
A number of criminal and civil investigations have been carried out in relation to the failure of Arck and the loss of approximately £45m of investors’ money.
In December 2012, the Serious Fraud Office announced that it was investigating Arck and any related companies for allegations of fraud. Financial advisers were subsequently asked to fill in a questionnaire.
In November 2013, two of the HD SIPP trustees, Kathryn Clark and Richard Clay, were charged with fraud and forgery offences. Last year, the pair pleaded guilty to the offences.
Six months
In an announcement issued on Friday, the FSCS said it will start investigating claims and, if the claim is valid, will compensate investors within about six months.
“This will include customers with claims against failed financial advisers who were previously told there was not enough evidence to prove the adviser was liable for losses,” it said.
Investors could potentially have two separate claims: either a claim against a financial adviser (investors must be able to demonstrate the adviser gave bad advice), or a claim against HD Administrators relating to its role as operator of the HD SIPP.
In March last year, Yorkshire Bank allowed some investors to use its support scheme to help speed up the compensation process.
