FSA turns screw over split-caps

THE Financial Services Authority has produced a 'schedule' of alleged wrongdoings and hired the world's biggest accounting firm to break the deadlock in its battle with City firms over the split cap investment trusts fiasco.

Firms will shortly be notified of allegations as the City's chief watchdog, led by John Tiner, tries to ratchet up the pressure on them to agree compensation for investors.

The move comes six weeks after firms ignored the FSA's call to sign up to detailed talks.

Forensic accountants with PricewaterhouseCoopers are working with the FSA to calculate what the 21 fund managers and stockbrokers should pay into a fund to compensate the estimated 50,000 investors who lost about £600m when splits values dived two years ago.

The FSA's latest charges, known by insiders as the 'schedule', aim to give more evidence as to why the institutions were to blame for a sector which collapsed with a domino-like effect. Many of the trusts invested heavily in each other.

But insiders said the allegations would again fail to bring firms to the table as the regulator has no more evidence than that already supplied by the companies to the FSA, material which their lawyers say is not overly incriminating.

The firms, which include fund managers Morley, New Star, Jupiter, Aberdeen Asset Management and brokers Collins Stewart, HSBC and UBS, insist their insurers - who would be responsible for a payout - will not let them talk until they and their staff get immunity from FSA prosecution.

editor@thisismoney.co.uk