Former investors in Knight Williams, the failed financial adviser, are calling for an urgent meeting with Treasury ministers to win up to pounds 5m they are claiming in compensation for losses.
They are demanding a review of the arbitration system between financial advisers and their clients after the failure of many former investors to win claims for alleged bad advice.
Some 400 former clients, most of them members of the Knight Williams Action Group, are also seeking legal advice over whether they are entitled to redress from another company in the same group, which is still trading.
The firm that went into liquidation - from which clients were hoping to win compensation of several million pounds - was Knight Williams & Co.
Experts are doubtful whether investors can prove a legally valid contract for them to qualify as creditors of KW & Co.
A statement for creditors by John Williams, its managing director, suggests that after all debts are paid there will be assets of about pounds 1m, far less than investors are claiming.
A separate firm, Knight Williams Financial Management, is believed to have cash assets of up to pounds 15m, the proceeds of the recent sale of most of its funds to another manager, Singer & Friedlander.
According to those who have seen the unpublished report and accounts, Mr Robin Knight Bruce and Mr Williams are reported to have paid themselves almost pounds 400,000 each in salary and bonuses, compared with pounds 250,000 in the year to October 1993
Mr Knight Bruce, who retains control of KW Financial Management with Mr Williams, continues to live in a large mansion set deep in the Devon countryside. Mr Williams has a similar home in Rickmansworth, near London.
One investor, who declined to be named, said yesterday: "I find it an outrageous failure of the entire system of financial regulation that we should lose out in this way,
"We were advised by one company. The money was invested in Knight Williams Financial Management. But we have no recourse against KWFM, even though money it now has is from the sale to a third party of the right to manage our money."
KWFM is a member of the Investment Management Regulatory Organisation, the fund managers' watchdog. An Imro spokeswoman confirmed that KWFM continues to be authorised to trade.
Knight Williams was set up by Mr Knight Bruce and Mr Williams in 1980. The company advertised itself widely as a "retirement specialist" and within a few years it employed more than 200 staff in offices around the UK, managing assets of more than pounds 400m on behalf of 25,000 clients.
Problems began to surface in 1990, after stock market falls in the wake of the Iraqi invasion of Kuwait.
Investors' plight was worsened by heavy charges on the funds under management, which meant that financial performance had to be much higher than elsewhere to produce the same results.
But, many investors claimed that Knight Williams never clearly explained the risks of its investment strategy. Up to 70 investors who complained to the financial advisers' watchdog, Fimbra, were told to go through the regulator's independent arbitration system. Kenneth Jordan, a leading member of the Knight Williams Action Group, said: "The problem was that when people went through the arbitration system they were not helped by Fimbra to formulate their claim. This meant that their claims were usually turned down by the arbitrator."
One former director, who refused to be named, remains unrepentant, despite having been made redundant himself in May this year:
"It is true that people were losing their arbitration claims. You could argue that it was an unfair system. "But many of the people involved never had a proper case to argue, anyway.
"You had cases where, no matter how much you warned people that the value of their investment could go down as well as up, they were still shocked when that happened. Should they be compensated? I don't think so."