FCA has publicly censured Blue Gate Capital Limited and ordered it to pay £203,000 in restitution to investors who invested in the Connaught Income Fund, Series 1. The Fund was a UCIS, which Blue Gate took over as operator from Capital, and remained its operator for 3 years, up to the point of its compulsory liquidation.
FCA found the firm:
- breached Principle 2 in not conducting adequate due diligence on the fund before taking it on, failed to investigate potentially serious issues with the fund and failed to establish the fund was operating as it was supposed to; and
- breached Principle 7 in failing to communication with the fund’s investors in a way that was clear, fair and not misleading.
FCA would have fined the firm £10m if not for the financial difficulties the firm was in. Capital Financial Managers had already paid up to £66m for the benefit of investors.