FSCS investigates activities of Midas Financial Solutions (Scotland) Ltd
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.