FDL was set up by the UK financial services regulator after thousands of investors in the UK complained that they had lost money in ‘splits’.
These type of trusts – some of which were set up in Jersey – were sold as low-risk investments and attracted non-specialists, but after the market fall in 2000 the highly-geared funds declined sharply.
The UK’s Financial Services Authority, Jersey Financial Services Commission and Guernsey Financial Services Commission agreed a deal at the end of 2004 with 20 of the firms involved in split-caps, who contributed to a compensation fund totalling £144 million.
