People that have been caught up in the mini-bond mis-selling scandal of London Capital & Finance (LCF) are asking the government to take firm action.
On 27 July 2020, a petition was unveiled on the UK parliament website seeking the regulation of the investment products, plus compensation and protection for those who have lost money because of them.
“The government should immediately and fully reimburse investors who lost money on non-regulated mini-bonds which were marketed as regulated products, and protect other investors by regulating currently non-regulated products,” said Jayshiva Patel, who started the petition.
International Adviser understands that Patel was an investor in another defunct mini-bond investment firm, called Basset & Gold.
“The government could keep the recoveries from the administrators,” Patel added.
“Many bondholders have been completely neglected, have had no support, no means of compensation, and no oversight by the financial watchdog.
“This has led to many investors losing significant savings, and facing serious hardship. The government should take immediate action to reimburse those who have already lost money, and protect those who may lose money in the future.
“Mini-bonds promotions were approved by the Financial Conduct Authority (FCA).”
Changing practices
An LCF bondholder told IA: “[The petition] adds great impetus to our campaign, which is finally being taken more seriously at the FCA and by the new head [Nikhil Rathi].”
The watchdog recently banned the promotion of all speculative mini-bonds and illiquid securities to all retail investors.
The move started with a year-long temporary ban from 1 January 2020, and was then changed to a permanent measure.
Additionally, HM Treasury has unveiled a consultation that could give the regulator powers to have the final say on the promotion of financial products.
At the time of publication, Patel’s petition had 737 signatures. It will need 10,000 to receive a reply from the government, and 100,000 to be debated in parliament.
