The Finance Conduct Authority (FCA) has announced that it will not be taking action against NCM Funds Services Ltd (NCM) and Northern Provident Investments Ltd (NPI) who approved the financial promotions of Blackmore’s mini-bonds.
In a letter to the chair of the Treasure Select Committee, Therese Chambers joint executive director of enforcement and market oversight at the FCA said that the regulator had concluded its investigation into the firms.
She said: “After looking in forensic detail at the financial promotions, our investigation concluded that these were largely accurate in what they set out and contained very relevant risk warnings to consumers. Therefore, we will not be taking enforcement action against the firms.”
A total of 7,330 hours were spent on the investigations and over 8,000 documents reviewed according to Chambers who said that they did not find evidence of ‘sufficiently serious’ breaches relating to NCM and NPI’s approval of the financial promotions to justify taking action.
Complaints
The letter also said that the FCA received 26 complaints referring to Blackmore which have been deferred since June 2021 while investigations were underway.
Consideration of these complaints will now restart with each complainant receiving a response from the regulator.
Blackmore Bonds went into administration in April 2020 after it raised money from retail clients into property starting at a minimum lump sum of £5,000.
However, most of the development sites it was supposed to fund barely even started construction.
To read more on this topic, visit: Insurers fail to pay mini-bond victims
Geoff Bouchier and Benjamin Wiles of Duff & Phelps were named joint administrators for Blackmore Bonds.
Who revealed that bondholders would not be able to get much of their investments back.
According to the joint administrators’ statement of proposals which was seen by International Adviser back in 2020, the firm issued six series of mini-bonds between October 2016 and November 2018 – raising over £46m.
But only had £906 in its bank account when it became insolvent.
According to the issuance terms, Blackmore was obliged to pay quarterly coupons to bondholders, and it was forced into administration after it failed to pay out twice.
