The Financial Ombudsman Service in the UK has agreed to review 150 investor complaints against NAB subsidiary Yorkshire Bank for its role as segregated bank account provider for failed property investment company Arck LLP,
Citywire reports.
Yorkshire Bank operated as a depository for Arck's investments, and investors believed sums invested in the account were protected against any failure of Arck because they were segregated and ring fenced.
Arck LLP collapsed at the end of 2011. In March, police in Nottingham charged two managers of a related company, HD Administrators LLP, with fraud by false representation and with money laundering.
On the same day, the Financial Services Authority effectively withdrew the licence of HP Administrators to operate on the grounds that it was failing. It cited the risk of loss to consumers and a failure to adequately protect clients' money.
Around 750 clients invested £60 million with Arck in the segregated account with Yorkshire Bank. But, according to the Financial Services Authority, from July 2011 the balance of the account was just £25. Law firm Regulatory Legal submitted the claims to the FOS on behalf of investors.