B
Black Swan
Big news this...Ouch. Simon if you're around, care to comment..? Shares in LCG only down 2-3% today..
London Capital Group (LCG) has revealed a potential liability of £7.7 million to claims from investors in Integrity Financial Solutions managed currency accounts, after the Financial Ombudsman Service (FOS) found in favour of a client claiming against it.
The FOS has made an assessment at adjudication stage that LCG should repay a client's total losses of £100,000 from the Integrity Managed Currency Growth fund. The claim related to commission rebating from the fund.
The Integrity fund invested money on LCG's foreign exchange platform where it was managed by a number of traders.
LCG said it believed its actions did not cause the loss, but added in an announcement to the market that losses incurred by all clients invested in the fund through the LCG platform amounted to £7.7 million.
'It is not yet clear to what extent LCG may be found to be liable for this total loss,' it said. 'LCG has sufficient resources to meet a liability which extends to the full amount which the fund lost. At this stage we do not have clarity on the extent of claims, or when any payments might be required to be made.'
Around 115 investors in foreign currency accounts held on the LCG platform have taken complaints to the FOS, although it is unclear how many of them invested in Integrity policies.
LCG said it would study the findings of the FOS before deciding whether to refer the decision for review by the Ombudsman.
LCG added the incidents were 'isolated'. 'LCG does not participate in any similar funds and has not done so since closing this programme in 2009.'
LCG shares were down 2.38p, or 2.3%, to 96.63p at 8:45am.
http://www.citywire.co.uk/new-model...471160?ref=new-model-adviser-latest-news-list
Spreadbetting group London Capital may have to pay up to £7.7 million to clients who lost money on a third-party currency fund, according to the Financial Ombudsman Service.
Despite a previous ruling, a second report by the Ombudsman ruled that the company, which provides a number of white-labelled services to well known brands such as Paddy Power, must repay £100,000 to investors who lost money in the third party fund.
Simon Denham, chief executive officer of London Capital Group, said a revised assessment of the situation was received by the company on 11 February 2011.
He explained, ‘On the basis of a previous decision given by the FOS in respect of this case, we had expected that the impact of the FOS enquiry would be immaterial on the business. However, a revised assessment from the FOS was received on 11 February.
‘While London Capital Group believes its actions did not cause the loss to the client in question, the FOS adjudicator has now made an assessment that London Capital should repay the total losses incurred by the client of £100,000 plus interest.
'While on its own this is not material, in total the fund to which the client belonged lost £7.7 million.’
London Capital Group has been in discussions with the Financial Ombudsman Service pertaining to commission rebating of a managed spot FX fund which occurred in H1 09.
The query was in relation to complaints from clients that had participated in the programme. It is not yet clear to what extent London Capital Group may be found to be liable for this total loss.
The company said in a stock market announcement that the group has sufficient resources to meet a liability which extends to the full amount which the fund lost
http://www.whatinvestment.co.uk/tra...g-firm-to-pay-compo-for-currency-losses.thtml
London Capital Group (LCG) has revealed a potential liability of £7.7 million to claims from investors in Integrity Financial Solutions managed currency accounts, after the Financial Ombudsman Service (FOS) found in favour of a client claiming against it.
The FOS has made an assessment at adjudication stage that LCG should repay a client's total losses of £100,000 from the Integrity Managed Currency Growth fund. The claim related to commission rebating from the fund.
The Integrity fund invested money on LCG's foreign exchange platform where it was managed by a number of traders.
LCG said it believed its actions did not cause the loss, but added in an announcement to the market that losses incurred by all clients invested in the fund through the LCG platform amounted to £7.7 million.
'It is not yet clear to what extent LCG may be found to be liable for this total loss,' it said. 'LCG has sufficient resources to meet a liability which extends to the full amount which the fund lost. At this stage we do not have clarity on the extent of claims, or when any payments might be required to be made.'
Around 115 investors in foreign currency accounts held on the LCG platform have taken complaints to the FOS, although it is unclear how many of them invested in Integrity policies.
LCG said it would study the findings of the FOS before deciding whether to refer the decision for review by the Ombudsman.
LCG added the incidents were 'isolated'. 'LCG does not participate in any similar funds and has not done so since closing this programme in 2009.'
LCG shares were down 2.38p, or 2.3%, to 96.63p at 8:45am.
http://www.citywire.co.uk/new-model...471160?ref=new-model-adviser-latest-news-list
Spreadbetting group London Capital may have to pay up to £7.7 million to clients who lost money on a third-party currency fund, according to the Financial Ombudsman Service.
Despite a previous ruling, a second report by the Ombudsman ruled that the company, which provides a number of white-labelled services to well known brands such as Paddy Power, must repay £100,000 to investors who lost money in the third party fund.
Simon Denham, chief executive officer of London Capital Group, said a revised assessment of the situation was received by the company on 11 February 2011.
He explained, ‘On the basis of a previous decision given by the FOS in respect of this case, we had expected that the impact of the FOS enquiry would be immaterial on the business. However, a revised assessment from the FOS was received on 11 February.
‘While London Capital Group believes its actions did not cause the loss to the client in question, the FOS adjudicator has now made an assessment that London Capital should repay the total losses incurred by the client of £100,000 plus interest.
'While on its own this is not material, in total the fund to which the client belonged lost £7.7 million.’
London Capital Group has been in discussions with the Financial Ombudsman Service pertaining to commission rebating of a managed spot FX fund which occurred in H1 09.
The query was in relation to complaints from clients that had participated in the programme. It is not yet clear to what extent London Capital Group may be found to be liable for this total loss.
The company said in a stock market announcement that the group has sufficient resources to meet a liability which extends to the full amount which the fund lost
http://www.whatinvestment.co.uk/tra...g-firm-to-pay-compo-for-currency-losses.thtml
).
