A claims manager is attempting to mount a class action against Old Mutual International for its role in allowing high-risk investments through an Isle of Man-based bond wrapper.
Old Mutual International is an offshore life company providing open architecture portfolio bond wrappers through which investors, including expatriates, can invest in thousands of different funds.
It is understood some of the funds held within the wrapper have lost significant value, with the claims manager targeting Old Mutual International as the facilitator through the wrapper.
The claims are understood not to involve any accusations of unsuitable recomendations from financial advisers within the Old Mutual group. An Old Mutual spokesman says that as the wrapper provider, it is not responsible for the suitability of recomendations.
Because Old Mutual International does not provide any services outside of the provision of insurance policies, it is not responsible for investment selection or performance, or the financial advice investors receive, the firm says.
It is also pursuing some of the providers behind funds sold through the wrapper to recoup its own losses, it is understood.
The spokesman adds: “We are aware of the allegations and have responded to those in detail. The allegations are baseless and without merit.”
Old Mutual International Isle of Man currently has 500 employees based near Douglas.
City AM also reports that Friends Provident International is in the firing line for a group of up to 300 investors who put money in unregulated collective investment schemes in jurisdictions including Cyprus and the United Arab Emirates through Isle of Man subsidiaries.
According to City AM, fund losses for investors allegedly amount to £200m, with class action set to commence within the next two months.
FPI did not provide comment to Money Marketing by deadline. In a comment provided to City AM, the insurer said it denies any allegations of wrongdoing.
FPI was formerly owned by Aviva and sold to International Financial Group for £240m last July.
How did the investors purchase these funds/investments then? Was it execution only? What’s the point of even trying to make a claim? Surely it’s a waste of money? The insurers should be allowed to send an invoice for wasting their time to the CMC’s!