In 2018 the regulator ordered the Discretionary Fund Manager (DFM) Organic Investment Management Ltd to stop performing any regulated activity

This was due to concerns set out by the Financial Conduct Authority (FCA) about potential high-risk investments. The company went into administration on the 20th December 2018.

The decision notice issued by the FCA stated that Organic was responsible for managing £70m worth of assets from various Self-Invested Personal Pensions (SIPPs), Model portfolios and Ucits funds. The Organic Long/Short Alpha fund and the Organic Bond fund have subsequently been suspended as a result of some assets not being correctly valued.

Warnings Issued

The company was first issued with warnings by the FCA regarding a failure to comply and various oversight controls in 2016. A particular concern was with the level of exposure of the Model portfolios to high-risk and illiquid assets. Regardless of what their attitude to risk was, clients that put money into Model portfolios were still exposed to high-risk investments.

When the number of client redemption requests increased, the company was guilty of using the money from the funds whilst further liquidating even more assets when needed. This resulted in an increased exposure to illiquid assets for the clients still holding funds.

Not Addressing Investment Risks

It was ruled by the FCA that Organic Investment Management Ltd shouldn’t be allowed to continue to manage funds or portfolios due to repeated failures in addressing risks that the company exposed its clients to.

Next Steps

Call us now for a phone or video consultation with one of our legal experts on 0800 041 8358 to find out if you are entitled to compensation, you may even be entitled to additional compensation if you have successfully claimed in the past.

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