Orkney and Shetland MP, Alistair Carmichael, has this week led a parliamentary debate on the Midas fraud which cost people across Scotland enormous sums, including in the Northern Isles. Mr Carmichael used the debate (on Tuesday) to highlight the financial and personal cost suffered by those affected, and to call for reform so that future victims of fraud would not have to pay the legal costs necessary to investigate what should have been the responsibility of the financial regulator.
Speaking in the House, Mr Carmichael said:
“I know from my constituency casework that, bad though the situation around Midas Financial Solutions is, it is far from the only case. I have another such constituency case, although I will not refer to it as criminal proceedings are still live and it would therefore be improper to do so.
“Today’s debate is the latest junction in a road that has represented six years of casework for me. I have worked with constituents who have lost tens of thousands of pounds—some have lost hundreds of thousands of pounds.
“We have to bear in mind that the sums involved are massive—tens or hundreds of thousands of pounds—and represent life savings or perhaps an inheritance. One of my constituents remains £80,000 out of pocket to this day.
“The effect of the court’s decision [on Midas] was to create a two-tier system of protection for UK investors. Most of those who suffered loss as a consequence of the activities of Alistair Greig have been compensated in full as a consequence of the legal proceedings that were taken by Colin Stewart and the 94 other investors. The 95, however, are still out of pocket to a collective tune of £2 million in legal fees. My constituent has been left with an £80,000 shortfall for the money he invested. It seems wrong to me that, even where the FCA is entitled to make ex gratia payments, it has refused to do so.
“The FCA acted so badly and inadequately that it had to issue a letter of apology in June 2020 to the people who had invested, but will not do anything to make good the losses sustained by my constituents and others in exposing conduct which the FCA should have exposed. We pay the Financial Conduct Authority a lot to regulate, and we deserve better.
“The intention of Parliament was clearly that people should be protected from this sort of behaviour and for there to be some compensation. The Financial Conduct Authority has wriggled like worms on the end of a hook for years, continuing to deny any liability. Our constituents deserve better.
“At the end of the day, it is a question of not only law or justice, but the culture and the relationship between the citizen and the state. I am afraid that, as things stand, the citizens are being short-changed by the state.”