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Alex J.
Alex J., Solicitor
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Experience:  Solicitors 2 years plus PQE
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I lost money in a hedge fund fraud. The culprit received 7

Customer Question

I lost money in a hedge fund fraud. The culprit received 7 years prison. the FCA was the prosecuting body. I hold Lloyds bank and my pension administrator culpable too. Can I claim against them ?
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
You may be able to hold Lloyds and the Pensions Administrator culpable. Can you tell me a bit about what role they played and can you confirm how much you lost?
Kind regards
AJ
Customer: replied 1 year ago.

Lloyds were the bankers for the hedge fund. They knew he wasn't using the funds for trading but said nothing. They also saw my pension monies come in and used for the hedge fund owners personal spending. I hold the pension fund trustee cuplable too as I asked if this company was ok for my SIPP. They said yes but obviously did no due diligence because I subsequently found out the fund auditors and administrators didn't exist and that the prospectus was fake. I lost over 1.5mm GBP

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
I will deal with each point in turn.
Firstly I am not convinced that you have any claim against the bank. Ultimately a bank cannot vet the business and trading activities of every customer. To owe such a duty of care to a third party such as yourself would be highly onerous and would probably make our banking system unworkable.
Secondly in relation to the pensions administrator - I agree you may have a claim. Ultimately they are responsible for giving you professional advice and held them selves out to be competent and accordingly you were entitled to rely on their opinion about this company. If they did not carry out due diligence then potentially they have been negligent. Under the Supply of Goods and Services Act 1982 S.13 they are legally required to provide a service with "reasonable care and skill". If they breach this obligation then they are liable to pay you damages for all losses that are reasonably foreseeable.
How to proceed:
- £1.5million is a huge sum of money and you cannot simply issue a claim without evidence as any claim would be in the High Court;
- What I suggest you do is without making allegations start by asking the administrator what due diligence they conducted into this company and see what you can obtain from them in writing ;
- The next step will be to put them on notice that you are holding them responsible for your losses on the basis that you do not believe they exercised reasonable care and skill in providing the service;
- I do not think you can advance any claim without a solicitor - firstly they are much more likely to take your claim seriously if they receiev a letter from a solicitor as they will then know you have taken advice and secondly as this will be a High Court claim the civil process is complex. If you need someone to recommend you a solicitor contact the www.lawsociety.org.uk/
- If you do not want the hassle or expense of a court claim then your only other alternative is to make a written complaint to the pensions administrator and if they do not respond appropriately make a complaint to the Financial Ombudsman - www.financial-ombudsman.org.uk/
- If you wanted to you could try and make a complaint about the bank to the FoS (as it costs nothing) I am just not convinced that the FoS will view the bank as having done any thing wrong.
I look forward to hearing from you.
Kind regards
AJ

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