Professional Indemnity

Represented professional indemnity insurers
of one of the fund managers involved in the
multi-million pound split capital trusts losses suffered by investors.
   

From 2001 to 2003 up to 40 split capital investment trusts were suspended from trading or had appointed receivers and up to
50,000 investors had lost money. Estimates put those losses at
more than 620m.

Following concern amongst the regulatory authorities and
parliament and against the background of potential class actions
by investors, the FSA launched a formal investigation into the
splits market.
This gave rise to a FSA initiative for the splits market to
compensate investors.

 

We were retained by the professional indemnity insurers of one of the fund managers of split funds scrutinised by the FSA. The potential exposure to insurers was very substantial.

Our clients had underwriting and coverage concerns and the matter was resolved with insurers making a nominal contribution.

 

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