Tuesday, 20 October 2015

Breakthrough for investors seeking justice over Secured Energy Bonds scam

There have been some encouraging signs of progress, with the Government and the Financial Ombudsman Service (FOS), for investors embroiled in the Secured Energy Bonds (SEB) scam that saw most the funds invested disappear before being used to put solar panels on schools.

Some 973 investors were left high and dry earlier in the year when SEB plc went into administration, after Australian parent CBD Energy siphoned off more than £5 million of the initial £7.5 million investment intended to put solar panels on 22 schools.

It is reported that six schools were fitted with panels but administrators Grant Thornton have been unable to provide more detail on these installations.

The latest break for investors came when Conservative MP Andrew Rosindell put down a Parliamentary question asking “the Chancellor of the Exchequer, what steps his Department is taking to ensure that the FCA acts to prevent companies from fraudulently using capital raised from selling ring-fenced bonds to bail out poorly performing parent companies.”

More than 69 Mps have now been contacted by investors, many have written to the Financial Conduct Authority (FCA), which has mainly referred people onto the FOS.

This line of approach begins with complaints lodged by investors in the first instance to Independent Portfolio Managers (IPM), for its failure to safeguard investors interests and ensure accurate information was provided at the outset, despite being mandated to fulfil such a role as “the security trustee.”
To date IPM are turning down investors claims, leaving them to move on to the FOS to adjudicate.

There have though been recent encouraging developments, with early indications that the FOS will be taking the complaints on. What is more the FOS have made clear that investors need not now go first to IPM but can take their complaint direct to them.

A number of investors have also reported the losses to the police via Action Fraud. They await a response from the police. 
Meanwhile, as more MPs become involved in the process, questions are increasingly being asked of government and the regulators as to just what they are going to do to ensure that investors are fully compensated for their losses.

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