Edition: Global  
One News Page
“Probably the fastest-access news portal in the world”
> >

This is why Capita has not been slapped with an enormous fine by the FCA

City A.M. Friday, 10 November 2017 ()
This is why Capita has not been slapped with an enormous fine by the FCACapita has swerved an enormous fine from the Financial Conduct Authority (FCA) despite leaving investors with big losses from the collapse of one its funds. 

The City watchdog concluded that if it fined the FTSE 100 giant, there would be no money left to compensation those left out of pocket by the failure of Guaranteed Low Risk Income Fund.

Instead, Capita has agreed to pay £66m of compensation back to customers affected. 

Capita was expecting to pay a fine on top of the compensation and had made a £37m provision for penalties and associated legal costs.

*Read more*: Shares in freefall for troubled outsourcer Capita as revenue slides

*Bridging finance*

The fund, later known as the Connaught Income Fund, was launched in 2008 to provide short-term bridging finance to property development firms. Capita resigned as the fund's manager in 2009, with the vehicle being wound up in 2012.

The FCA found Capita had failed to conduct adequate due diligence on what the fund was doing, failed to rectify this failure when it realised and "failed to adequately monitor the Fund throughout most of its tenure as operator".

The FCA also found Capita failed to communicate with the fund’s investors in a way that was "clear, fair and not mis-leading".

In a statement the FCA said:



These failings would ordinarily have resulted in the imposition of a penalty. However, the FCA has taken account of the fact that CFM [Capita Fund Managers] itself would not have been able to make a payment of up to £66m for the benefit of the fund’s investors if a financial penalty were also imposed.



"For this reason, the FCA does not consider that it would be appropriate to require CFM to pay a financial penalty, and has instead issued a public censure in relation to CFM."

FCA executive director of enforcement and market oversight Mark Steward said: “The aim of the payment announced today is to return the amount originally invested, placing investors as closely as possible back into the position they would have been in if they had never invested in the fund."

Capita said: "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."

*Read more*: Capita chief exec falls on his sword as profits drop by a third






0
shares
Share on
Facebook
Share on
Twitter
Post on 
Reddit
Share by
Email
 

You Might Like


Other recent news in Business

A bidding war for 21st CENTURY FOX could break out — here's how it got to that point (FOXA, VZ, DIS, CMCSA)Comcast and Verizon in bid approach for 21ST CENTURY FOX
From horror show to too big to fail: City reacts to CARILLION meltdownElon Musk says Tesla made a new ROADSTER to be a 'hardcore smackdown to gas-powered cars' (TSLA)
TESLA UNVEILS new electric truckJAGUAR LAND ROVER tests driverless cars on public roads
Red lorry, Tesla lorry: Here's everything we know about ELON MUSK's truckEconomists warn: Retailers are at risk of overdoing BLACK FRIDAY
KEYSTONE PIPELINE Leaks 210,000 Gallons of Oil in South DakotaFinance Minister Arun Jaitley welcomes Moody's rating upgrade, says NARENDRA MODI's reforms universally acknowledged

Twitter

Environmentally friendly: One News Page is hosted on servers powered solely by renewable energy
© 2017 One News Page Ltd. All Rights Reserved.  |  About us  |  Disclaimer  |  Press Room  |  Terms & Conditions  |  Privacy Policy  |  Content Accreditation
 RSS  |  News for my Website  |  Free news search widget  |  Help  |  Contact us  |  DMCA / Content Removal
How are we doing? Send us your feedback  |   LIKE us on Facebook   FOLLOW us on Twitter   FIND us on Google+