Disgruntled investors who lost money in failed luxury hotel resort developments may now have a claim for compensation.
The Financial Services Compensation Scheme says more investors in Harlequin Investments can make claims directly against negligent advice recommending the scheme.
The FSCS is already handling claims against IFAs who advised clients to take out mortgages and switch pension cash to fund investments in Harlequin.
The government-backed service explained an investigation has revealed the scheme was an unregulated collective investment scheme (UCIS) that qualifies for FSCS protection.
“This paves the way for more people who may have been missold a Harlequin product by their financial adviser to make a claim for compensation,” said a spokesman.
£400m staked in Harlequin
“Anyone who thinks they may have a valid claim should contact FSCS for more information.”
Thousands of retirement savers invested an estimated £400 million in Harlequin on the advice of IFAs in the UK, who allegedly received 15% commission on the deals.
The firm marketed a 10% guaranteed return on investing in luxury villas in prestigious resorts in the Caribbean.
The main resort was at Buccament Bay in the St Vincent and Grenadine Islands, where the scheme was declared bankrupt and control handed to trustees earlier this year.
The company appealed the court ruling claiming most investors were against bankruptcy, but lost the case.
The scheme collapsed after the UK Financial Conduct Authority warned against investing without taking independent legal and financial advice.
In February, the Serious Fraud Office charged David Ames, 65, who chaired the Harlequin group, with three counts of fraud. He is awaiting trial in London.
The Buccament Bay resort closed in December 2016 amid reports of unpaid bills and staff wages.
Ames has repeatedly stated he has worked to mitigate investor losses and will clear his name.
“Ever since the summer of 2010, I have fought tooth and nail to protect investors’ interests – and won important legal battles along the way – and I will continue to fight for their financial futures,” he was reported as saying in Economia, a magazine published by the UK accountancy body ICAEW in February.