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New Split Cap Action Launched

by Robin Pilgrim, LawAndTax-News.com, London

20 December 2005


It emerged at the weekend that a new class action suit has been brought against several fund managers involved in the mis-selling of split-cap investment trusts.

Although investors with zero dividend shares who lost money when several of the highly geared, and therefore high risk vehicles collapsed are being compensated via the FSA's Fund Distribution Limited scheme, those with ordinary or income shares in split cap trusts did not qualify.

Speaking to The Business Online news service, Stephen Alexander, senior partner at Class Law, the firm appointed to bring the group litigation, observed that:

"It's bizarre really. They were advised as low-risk investors to buy high-risk shares in geared companies - so they were mis-sold yet assured they were safe as a Volvo."

The GBP25 million claim is being made on behalf of 75 investors. However, many more are expected to join the action.


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