The City watchdog has censured collapsed bond scheme London Capital and Finance (LCF) for ‘unfair and misleading’ promotions – but failed to fine it.
The Financial Conduct Authority (FCA) said a fine would divert money that could otherwise go to long-suffering investors.
LCF collapsed in 2020 in a major scandal after it was unable to meet the high returns it promised bondholders. It said its funds – about £237m at the time of its crash – were invested on bondholders’ behalf.
The Financial Conduct Authority (FCA) said a fine would divert money that could otherwise go to long-suffering investors
But after its collapse around 11,600 people, many saving for retirement or retired, were unable to get their money back. Some were able to get payments from the Financial Services Compensation Scheme, but most were not eligible, causing the Government to bail out savers.
The FCA yesterday said that LCF’s misleading promotion made its bonds ‘appear a far more attractive investment than they were’.
They were not told about hidden charges, and the high risk involved, the FCA said.
Therese Chambers, joint executive director of enforcement and market oversight, said: ‘We recognise our censure will not provide solace to those investors who lost out.
‘But it is important we set out what went wrong at LCF and how their promotions misled people into parting with their money.”
The Serious Fraud Office is investigating whether to bring fraud charges against those who ran LCF.
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