Stirling Mortimer has described the decision as “quite incredible”.
In a statement sent to International Adviser, the company said: “The SFO have announced that they are closing their investigation into the allegations of fraud being perpetrated against [Stirling Mortimer Global Property Fund (SMGPF)].
“The board of the fund find this decision quite incredible considering that the fund has secured judgements against the individuals concerned in the civil courts. The property manager, directors and fund administrators have also spent considerable amounts of time providing statements and evidence to the SFO.
“The SFO have concluded that they cannot obtain sufficient evidence to obtain a conviction and the board of the fund find this very difficult to understand.
“The property manager has made representations to the SFO regarding this decision but have been refused an appeal. The board will now investigate other avenues to bring the alleged fraudsters to justice,” the company added.
Cape Verde and Morocco funds
In December 2012, the UK watchdog launched an investigation into allegations of fraud against a number of investment funds operated by SMGPF, a protected cell company with limited liability based in Guernsey.
Stirling Mortimer Funds are registered, closed-ended Guernsey domiciled funds offering clients investments typically linked to property developments.
This investigation focused on three SMGPF funds which operated between 2007 and 2011:
- Stirling Mortimer No.4 Fund Cape Verde;
- Stirling Mortimer No.6 Fund Morocco;
- Stirling Mortimer No.7 Fund Cape Verde II.
On Monday, the SFO announced it was closing the investigation.
Financial Services Compensation Scheme
Clients of defunct IFA firms who invested via a Sipp, however, may be entitled to compensation from the FSCS.
In a January 2015 update, the FSCS advised that it was unable to make decisions on claims involving the three SMGPF funds until the SFO investigation had been concluded.
Two months later, the lifeboat scheme added it had considered the liability of the defaulted IFAs that advised customers to invest in the funds.
Based on the evidence available, the FSCS said at the time that it was “satisfied that, where mis-selling can be proven, the IFAs can be held liable for any losses suffered by customers in relation to the three Stirling Mortimer funds”.
Other investors have chosen to pursue compensation via the UK Financial Ombudsman Service.
In February 2017, the ombudsman determined that the advice given to an IFA client was unsuitable and ordered the adviser to put the client as close as possible into the position he would likely have been in, had he been given suitable advice.