On 22 February 2021, Mr Justice Mellor handed down judgment in FCA v Golding, on the Financial Conduct Authority’s application for directions as to the proper approach to distributing £3.5 million to investors in two investment schemes, where the FCA had intervened to protect consumers. Adam Temple appeared for the FCA.
At a remote hearing attended by over 150 people, the Judge heard the FCA’s submissions on the proper approach where there were multiple investment schemes. He then heard from 21 individuals and considered written comments in the ‘chat’ function from further individuals.
The main issue was whether the FCA should distribute the funds equally across the two investments, or with discrete distribution schemes. If there was a single scheme, investors across both schemes would recover the same proportion of their losses; if there were separate schemes, then investors in the later scheme would recover more of their losses than investors in the earlier scheme. The Court agreed with the FCA’s proposed approach, that there should be separate distribution schemes, holding that this was necessary to respect the differences between the investments.
The Court also approved the FCA’s approach of taking into account capital sums lost by investors, rather than calculating losses by reference to the unrealistic returns promised by the promoters of the schemes.