The Financial Services Authority yesterday dismissed reports that it has abandoned its investigation into the mis-selling of split-capital investment trusts.
The denial came amid speculation that the total ''bill'' for the scandal could top (pounds) 1bn - three times more than the (pounds) 350m which the regulator said it believes investors are due in compensation for their losses.
Last week the FSA abandoned its attempt at a mediated settlement with the 21 firms it is investigating for alleged collusion in the launching of split-caps. John Tiner, the chief executive of the FSA, has demanded (pounds) 350m from the companies, a figure described as ''fantastic'' and ''unaffordable'' by the majority of firms, which have refused to fall into line.
Martin Gilbert, chief executive of Aberdeen Asset Management, the biggest seller of splits, is believed to be among those attempting to broker a voluntary settlement of (pounds) 120m.
It was reported yesterday that the regulator's parallel probe into mis-selling has been quietly shelved, despite absorbing two year's of the regulator's time and huge resources. However, this was emphatically denied by a spokeswoman for the authority, who said: ''That is inaccurate and untrue,'' she said, ''we are still investigating some firms for mis-selling.'' She declined to give any further details.
Many splits were sold to investors between 1999 and 2001 under the banner of benign slogans such as ''the one-year-old that lets you sleep at night'' or ''having more safety features than a Volvo''.
The two-pronged investigation into both mis-selling and collusion was launched in 2002.
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