FSCS investigates activities of Midas Financial Solutions (Scotland) Ltd

Maria Nikolova

The compensation scheme is accepting claims against Midas Financial Solutions (Scotland) Ltd, although these claims have not yet been passed to its claims processing teams.

The Financial Services Compensation Scheme (FSCS) today published a notice on its website concerning Midas Financial Solutions (Scotland). The Scheme informs the victims of an alleged illegal scheme operated by Midas that they may be eligible for compensation.

Midas operated as an appointed representative of an authorised firm. This firm offered financial advice to customers in the Aberdeen area.

FSCS is investigating the activities of Midas and, in particular, advice given to customers to invest in high-interest short term deposit accounts. The investments were touted as carrying attractive guaranteed returns placed on favourable terms due to the owner’s relationship with a well-known high street bank.

In reality, however, the high-interest accounts had never existed. Instead, investors’ money was placed into a so-called ‘Ponzi Scheme’ operated by the owner of Midas.

FSCS is aware that many of the investors lived in the Aberdeen area and is encouraging them to register a claim for compensation with FSCS at www.fscs.org.uk. Alternatively, they can telephone FSCS’s customer contact centre on 0800 678 1100.

Although FSCS is accepting claims against Midas Financial Solutions (Scotland) Ltd, claims have not yet been passed to FSCS’s claims processing teams for assessment. This is because the body is still carrying out its investigations into the activities of the firm.

Firstly, FSCS needs to establish whether there are ‘protected claims’ against Midas Financial Solutions (Scotland) Ltd. For this to happen the Scheme has to know that the firm owes a civil liability to customers that would enable them to sue the firm in court. Put otherwise, that a UK court would hold the failed firm responsible for a customer’s losses.

Importantly, this civil liability must be in connection with a regulated activity carried out by the firm. Currently, FSCS’s investigations are focusing on the actions of an individual associated with the firm.

Allegations of fraudulent activity have been made against the firm and this individual. They relate specifically to the fraudulent sale of short-term deposits carrying very high interest rates. At present, the FSCS legal team are considering information in relation to the alleged fraud. They want to reach a view on what regulatory breaches may have occurred.

Read this next

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.


Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

Digital Assets

Thailand closer to launch digital asset exchange “to serve the needs of younger generations”

TDX is a subsidiary of the Stock Exchange of Thailand (SET) and its incorporation is part of the group’s strategic position to connect capital markets, open opportunities for the business sector in raising funds and cater to investment demand of new generations.

Digital Assets

Russia to legalize cryptocurrency payments as sanctions bite

Russia could soon be the latest country to lay down ground rules for legalizing cryptocurrencies as a means of payment, a sign that governments around the world are realizing that digital assets are here to stay.

Institutional FX

XTX Markets UK reports lackluster results for 2021

The UK business of XTX Markets, a non-bank FX liquidity provider and market maker, has reported its financials for the fiscal year ending December 31, 2021. The report showed impressive metrics after seeing revenues and customer activity increase even as the pandemic trading boom fizzled out.

Digital Assets

Binance in talks with BaFin to get license in Germany

Changpeng Zhao (CZ), founder and CEO of Binance has confirmed that they are in talks with Germany’s regulators to secure a local crypto license.