Split caps deal denounced

Over the holiday, the Financial Services Authority published details of a £194m scheme designed to give thousands of investors some of their money back.

A leading solicitor has denounced the compensation for split cap investors as insufficient.

The split cap scandal is one of the most embarrassing to rock the City of London in recent years.

The City's regulator, the Financial Services Authority (FSA), has been negotiating with financial firms for months, trying to pressurise them into providing compensation.

But solicitor Stephen Alexander, who is bringing legal claims against the firms and financial advisers involved, says the settlement is a huge disappointment.

FSA failure

"We think there has been serious miselling and misadvice by an awful lot of people," says Mr Alexander.

"If the FSA was going to come up with a decent scheme then it should have provided a great deal more.

"They failed to put pressure on people, they failed perhaps to take the steps that they should have done," adds Mr Alexander.

The compensation package is worth £194m, little more than half the amount the FSA was originally targeting.

That could work out at around 55p in the pound for eligible investors.

But they will have to apply, the payments won't be automatic, and some classes of share and some providers are excluded from the deal.

There will be a minimum payment of £250 - so amounts less than that won't qualify.

More details

Investors need to have owned their split cap shares between July 2000 and June 2002.

Split cap compensation - firms NOT included BFS Exeter Asset Management B&C Asset Management Teather & Greenwood

If they get anything, it should arrive before the end of this year, but there will be more details about applying for the money coming out in the spring.

The FSA's aim was negotiate a swift compensation deal with firms rather than get tied up in years of wrangling over who should be blamed and punished.

The regulator says it has achieved this.

However, the deal will fall short for a lot of people, leaving many disappointed

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