City-based investment firm Pello Capital (FRN 449720) has been declared in default by the Financial Services Compensation Scheme.

The default declaration by the FSCS opens the door to ex-clients to submit claims of up to £85,000.

It launched an investigation into the firm in May 2023 after the FCA raised concerns about fraud and money laundering.

Pello Capital Ltd was authorised by the FCA from 5 February 2007 until 15 November 2022. Pello was a wealth management firm that offered a range of services to its clients, including stockbroking, online share dealing, foreign exchange trading, corporate broking and pensions.

Pello was authorised from 2007 as an IFPRU 50K Limited Licence investment firm. It was allowed to conduct a range of investment-related regulated activities including advising on, arranging, dealing in (as principal and agent) and managing investments. Pello was allowed to control but not hold client money and assets.

Pello was placed in creditors voluntary liquidation by its directors on 14 December 2022. The directors of Pello decided to place the firm in creditors voluntary liquidation, following action taken by the FCA to place requirements on Pello in November 2022 which stopped it from conducting regulated activities and restricting it from disposing of assets.

The FCA said it had numerous concerns about the company including on governance, money laundering and non-payment of bills to the FCA, including an invoice for £165,600 for an FCA review. The FCA said in its notice: “The Authority has identified serious concerns relating to Pello.”

Pello closed more than 1,200 client accounts after the FCA raised concerns about whether the company had carried out sufficient regulatory checks on the clients to know who they were. Adam Stephens and Mark Ford of Evelyn Partners LLP were appointed Liquidators of Pello in December 2022.

The FSCS declared Pello Capital Ltd ‘in default’ on 26 November this year. It said: “This means FSCS can now pay compensation to customers if they have a valid claim. We're continuing to assess claims on an individual basis.”

It added: “Each claim will be assessed on its own merits and in the order they were received. Please note we are unable to give an exact time scale for when any individual claim will be processed and a decision issued.”