Connaught final settlement

About this update from Capita Plc

[{"type":"text","content":"\n \nCapita concludes full and final settlement with FCA regarding\n\nConnaught Income Series 1 Fund\n\nCapita plc (“Capita”) announces today that it has agreed a full and final settlement with the Financial Conduct Authority (FCA) regarding the Connaught Income Series 1 Fund (“The Fund”). Capita Financial Managers Limited (\"CFM\") was the Operator of the Fund until September 2009, when it was replaced by an unrelated company as Operator, following which CFM had no further involvement with the Fund. The Fund went into liquidation in 2012 and its liquidator brought a claim against both former Operators, which for its part, Capita settled in 2016 for a sum of £18.5m.\n\nThe FCA has been undertaking a formal review of the activities of both Operators and has announced today that it has concluded that CFM did not meet all of its regulatory requirements in the period April 2008 to September 2009. To ensure that investors receive appropriate redress and to bring this matter to a close enabling the smooth disposal of CFM, CFM and Capita have agreed a full and final settlement with the FCA. In reaching this settlement, the full cooperation which CFM has given to the FCA during the course of its investigation has been acknowledged.\n\nCFM has agreed to up to a further £66 million being made available for the benefit of the Fund’s investors, with Capita agreeing to fund this amount. The FCA considers that this payment will be sufficient to return the amount originally invested, taking into account any interest, distributions and other payments that have already been received, with the intention of placing investors as closely as possible back into the position they would have been in if they had never invested in the Fund. Capita is expecting to make redress payments to the Fund’s investors via the FCA and their agents during the first quarter of 2018.\n\nThis settlement allows for the available funds to be directed towards the Fund’s Investors. Given the circumstances, the FCA do not consider that it would be appropriate to require CFM to pay a financial penalty.\n\nAs the FCA had previously indicated to Capita that it was minded to seek a financial penalty against CFM, Capita had made provision for the full potential amount of the financial penalty and associated legal costs (£37m). Based on the information available a...

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