As the fallout from the £230m collapse of London Capital & Finance continues, MPs have stood up in Parliament to ask angrily: where’s my job paying £354 an hour?
Excuse me a moment, I’ve been drinking too many Old Cynics. *sound of herbal tea pouring* There we go.
The Evening Standard’s Jim Armitage reveals today that the chairman of the Treasury Select Committee, Nicky Morgan, will formally write to the Financial Conduct Authority to ask why it did not act sooner over the repeated warnings it received from 2015 onwards, and what the circumstances were that made it finally take action.
She will also demand answers from the Treasury as to whether mini-bonds should continue to be unregulated by the FCA.
“The stories of those affected by the actions of LC&F are distressing, so the FCA is rightly investigating its promotional material for being misleading, not fair and unclear.
“However, the mini-bonds that were promoted by LC&F are unregulated.
“I will be writing to the FCA to understand what prompted the regulator to act, and whether it could have acted sooner. I will also write to HM Treasury to understand whether mini-bonds should continue to be unregulated.”
Shadow Chancellor John McDonnell has also called for answers.
“Many of the people who put their life savings into these investments will be asking the question: where was the regulator? It is starkly clear that the current system is not working effectively.”
Gavin Newlands (SNP member for Paisley and Renfrewshire North) also raised a question in Parliament regarding not just the collapsed LCF, but the currently-operating minibond firm Blackmore Bonds. In response, Tory leadership runner-up Andrea Leadsom described LCF’s collapse as “appalling”.
Gavin Newlands (Paisley and Renfrewshire North) (SNP): My constituent invested her £60,000 life savings in London Capital & Finance and had put £20,000 in a similar company called Blackmoor [sic from Hansard], which markets individual savings accounts with 7% interest, using a third party that took 25% commission, but the small print said they were not ISAs but investment bonds. LCF went into administration earlier this year after the Financial Conduct Authority ordered the sale of the bonds to stop, but investors’ money was lent to people with a connection to LCF, including its founder. Can we have a debate on this scandalous and fraudulent issue?
Andrea Leadsom: I had heard of this appalling collapse, and the hon. Gentleman is right to raise it. There will be people who have really suffered financially as a result of this. I suggest that he seeks an Adjournment debate so he can raise it directly with Ministers.
Johnny Mercer MP, meanwhile, who is employed part-time by Crucial Academy Limited, which is owned by Surge Group plc, and is a sister company to London Capital & Finance’s marketing agent, has started the PR fightback by: mocking another MP’s well-intentioned but rather silly idea to combat knife crime with a paper sign on his door reading “Ministry of Good Ideas”.