FSA: VC Fund Managers Exaggerating Potential of Trusts

London -- The Financial Services Authority (FSA) has accused a
number of U.K.-based venture-capital fund managers of exaggerating
the potential of venture capital trusts (VCTs) while playing down the
risks to investors. VCTs are invested in relatively high-risk areas like
unlisted companies and smaller companies listed on the London Stock
Exchange's Alternative Index Market (AIM). After conducting a review
of the marketing material of 15 local VC firms, the FSA said it had
reprimanded a number of firms for failing to meet acceptable standards
and putting undue emphasis on the tax benefits of VCTs without
mentioning the associated risks. The FSA, which issued a similar
warning in March, called on the companies to change their sales
material and warned that it could take action against those that fail to
comply.
http://www.fsa.gov.uk/
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