Midas Financial Solutions (Scotland) Ltd
Failed 09 March 2020
You might be eligible for compensation
Midas Financial Solutions (Scotland) Ltd (Midas) was based in the UK and operated as an Appointed Representative (AR) of Sense Network Ltd. Midas was previously authorised by the Financial Services Authority (FSA). As an AR, Midas advised customers on a range of investment products.
As the firm is no longer authorised, it is no longer able to provide regulated products or services.
FSCS is accepting claims against this firm.
See our investment compensation limits and their conditions on our Investments page.
Download the determination papers here (pdf 0.2MB)
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15 May, 2020
FSCS has now passed claims relating to the illegal ‘Midas scheme’ to our claims assessment teams. As such we started paying compensation to victims from 1 May. We expect to complete all claims by the end of July 2020, subject to any extra information requirements.
Earlier, we'd concluded that Midas Financial Solutions (Scotland) Ltd owed a civil liability to investors of the illegal ‘Midas scheme’. Consequently, eligible victims will now receive compensation.
Through our collaborative work with the Financial Conduct Authority (FCA) it has been possible to set up claims using FCA investor data. Where we received investor details from the FCA, those customers did not need to complete an online claims application.
We have now contacted by mail all the customers passed to us by the FCA, confirming they are eligible to receive compensation.
But it is possible that some investors in the illegal ‘Midas scheme’ were not known to FCA. So their details will not have been passed on to us. As such, if you feel you are due compensation as a result of investing in the ‘Midas scheme’, please make a claim via our online claims portal.
Please note, this is only in relation to the illegal ‘Midas scheme’.
Some customers may have been told that they would receive their compensation by the end of April. Unfortunately, we were unable to complete payments by this date. We appreciate the patience of all customers with these claims and will compensate eligible customers as quickly as possible.
06 Mar, 2020
FSCS has finished its investigation into Midas and can confirm that the firm does owe a civil liability to customers. It's our opinion that Midas had been operating an illegal or so-called ‘Ponzi’ scheme. This is a form of fraud that relies on new investment being used to pay ‘agreed’ interest to customers who invested in the ‘scheme’ at an earlier time. So, over time, the cycle continues, thus providing the illusion of a genuine scheme, which of course it is not.
We've been working with the FCA who have provided us with contact details of some of the investors in relation to the ‘Midas Scheme’. This means that we're able to determine and pay the compensation owed to these investors without needing them to submit an application to us.
We're now contacting them so they can be informed of the next steps. If you believe you have been a victim of the Midas Scheme (relating to high yield, short term deposits) please wait to receive this letter.
We expect letters to be with you by 20 March. If you do not receive a letter from FSCS by this date, please make a claim using our online claims service.
Please note, we are only accepting claims from victims of the Midas Scheme.
26 Feb, 2020
Although FSCS is accepting claims against Midas Financial Solutions (Scotland) Ltd, claims have not yet been passed to our claims processing teams for assessment. This is because we are still carrying out our investigations into the activities of the firm.
Firstly, we need to establish whether there are ‘protected claims’ against Midas Financial Solutions (Scotland) Ltd. For this to happen we need to know that the firm owes a civil liability to customers that would enable them to sue the firm in court. In other words, that a UK court would hold the failed firm responsible for a customer’s losses.
Importantly, this civil liability must be in connection with a regulated activity carried out by the firm. Currently, our investigations are focusing on the actions of an individual associated with the firm.
Allegations of fraudulent activity have been made against the firm and this individual. They relate specifically to the fraudulent sale of short-term deposits carrying very high interest rates.
Currently, the FSCS legal team are considering information in relation to the alleged fraud. They want to reach a view on what regulatory breaches may have occurred.
We will provide a further update in due course.