FSCS to compensate 2,500 Strand Capital investors

A formal distribution plan of clients’ custody assets has been approved by the High Court and costs will be covered by the Financial Services Compensation Scheme.

Strand was put into special administration in May 2017 after becoming insolvent due to a failed management buyout.

The breakdown of the intended buyout in 2016 resulted in key senior management, who held the relevant FCA regulated controlled functions, departing the company in March 2017.

This, linked with the breakdown of the relationship with the company’s trading platform provider, resulted in an agreement with the FCA to cease carrying on regulated activity.

In 2018, the FSCS paid out £5.7m to 796 customers of Strand. Today's announcement that a further 2,500 will have their investments returned means that almost all clients have now been refunded.

One of Strand's administrators, Smith & Williamson, urged clients to get in touch to provide details of where their assets should be sent.

Adam Stephens, partner at Smith & Williamson, said: "We believe this distribution plan provides the best outcome for Strand's clients as we are now able to return almost all clients' assets to them in full. The approval of the distribution plan, with the support of the FSCS, represents the achievement of an important milestone in this insolvency."