Investors in disgraced London Capital & Finance (LCF) are a step closer to learning what will happen to the company that mislead them about investing in mini-bonds.
The company entered administration after a joint enquiry by the FCA and the UK Serious Fraud Office took place in March 2019.
The firm issued mini-bonds and Isas on a non-advised basis promising returns as high as 8%.
The company was regulated by the FCA but the marketing material it used has been called into question.
LCF managed to take £236m ($294.6m, €263.8m) of investors’ money.
Dame Elizabeth Gloster was named as head of the independent investigation into LCF in May.
She is a former barrister and judge of the high court and court of appeal.
Complying with investigation
Gloster is planning the next steps of the inquiry, which will contact LCF bondholders, professional organisations and interested parties to gather all the necessary information.
But under the investigation protocol, if she needs to interview FCA staff, they can choose not to attend.
“The FCA will endeavour to secure the attendance at a meeting of any identified individuals who are current or former employees of the FCA. It should be noted, however, that attendance by an individual at a meeting with you is not compulsory under statutory powers,” according to a document outlining the scope of the investigation.
Gathering information
“Many people have been badly affected by the failure of London Capital & Finance,” Gloster said.
“There is rightly a great deal of interest in what happened at LCF and the role of the FCA. I am keen to hear from as many of those affected as possible and am grateful for the information I have already received from bondholders and others.
“I would encourage anyone who wants to engage with the investigation to get in touch with me.”
Gloster’s appointment has been approved by the economic secretary to the treasury and the investigation will start as soon as her team is fully in place.
LCF investors have also been told by the Financial Services Compensation Scheme they will potentially be eligible to claim redress.
