Towry Law International face $87M Mis-Selling Bill
(28/3/2006)
Financial advisory firm Towry Law International (TLI) may have to pay compensation of more than $87m to clients who claim they were mis-sold geared with-profits bonds.
TLI has been in negotiations with the Hong Kong Securities and Futures Commission since April 2005 over agreeing a compensation package for hundreds of aggrieved clients.
The negotiations began following Towry Law’s decision to close the international IFA firm in 2004. TLI is now believed to be close to reaching an agreement with the Hong Kong regulators over compensating clients who invested in with-profits bonds that were geared and the Circus Capital Protected Growth fund. Launched in 1999, the Circus Capital fund invests in with-profits bonds. The Dollar Series 1 version of the fund had a market value adjustor of 73.52% on 15 January 2006.
Aggrieved clients claimed there are 600 to 700 TLI investors in the Circus Capital fund and around 450 in geared withprofits bonds. In March 2005, Roger Yates, chief executive of Henderson, told analysts the firm had put aside $75m to meet possible claims from TLI clients. When Henderson sold Towry Law in December 2005, it retained TLI and its potential liabilities. Henderson said it is working with Hong Kong and “other relevant regulators to ensure all legacy product issues are dealt with appropriately”.
For holders of under-performing with-profits policies, Candour Consultancy offer a wide range of offshore `recovery` funds that aim to cover exit penalties whilst gaining access to performing asset classes such as property and managed equity funds.
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