After being denied compensation from the Financial Services Compensation Scheme (other than a tiny handful of exceptions,) London Capital & Finance investors have raised money via crowdfunding to launch a judicial review.
As at 23rd April the campaign had already raised £7,833, exceeding its initial £7,000 target. Technically the campaign is to fund the judicial challenges of only the four LCF investors on the creditors' committee, but if their challenges succeed, this will set a precedent for the rest.
London Capital & Finance investors have been both emboldened and enraged by the FSCS' early indications that it will bail out investors in fellow collapsed minibond scheme Basset & Gold, which went into administration on 1 April.
A couple of weeks ago West Ham sponsor Basset & Gold (reviewed here in December 2017) collapsed into administration.
So far so normal. Unregulated high risk investment fails, news at 11.
What was unusual about Basset & Gold is that back in 2018 at least, they were promoting their bonds while explicitly holding out that investors might be compensated by the FSCS if things went sour – on the basis of misselling.
Basset & Gold, which offered unregulated bonds, "pensioner bonds" and 30-day "cash bond" notice accounts, announced today that it has gone into administration.
[Hat tip to reader John Doe for spotting the announcement.]
As at its last accounts for September 2018, the company had raised £30 million from investors.
Basset & Gold has filed its accounts for the year ending September 2018.
Basset & Gold is now one of the UK's most visible issuers of unregulated bonds, thanks to its sponsorship of Premier League football team West Ham United.
It currently offers a one-year "Fixed Monthly Income Pensioner Bond" paying 4.24% over the year a 3-year IFISA paying 6.12% per year, and a 5-year IFISA paying 8.15%. All are capital at risk investments that, like any loan to a micro-cap unlisted company, have a risk of up to 100% loss.
According to its accounts, it now owes just under £30 million to investors, up from £13 million in 2017.
Its net assets position is slightly above water at £233,784.
Basset & Gold offers unregulated corporate bonds paying up to 7.46% per annum for bonds paying monthly income for a term of up to 5 years, 4.32%pa on 1-year “pensioner bonds” and 3.14% on “cash bonds” which pay interest bi-annually and are redeemable by giving 30 days’ notice.
Continue reading for a review of the Basset Gold fixed interest bonds.