This was the message delivered by John Tiner, managing director at the FSA, as the watchdog announced a broadening of its investigations into the ‘splits’ scandal.
Tiner said the problems with the trust were there weak structures, high levels of debt and cross-holdings, the FT reported.
‘To blame those events purely on the market is, I think, to bury ones’ head in the sand about the real problem and real causes,’ Tiner said.
The FSA investigation into splits was undertaken after 19 trusts collapsed and eight went into administration, resulting in investors losing much of their savings.
Some accounting firms have also been implicated in the scandal for advising their clients to invest in such schemes, marketing them as low risk investments.
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