To nobody's great surprise, the FCA announced this week that the temporary ban on marketing minibonds to retail investors would be extended indefinitely.
It would have been big news if the FCA had come up with any reasons why promotion of ultra high risk unregulated minibonds to retail investors should be allowed to start up again.
Continue reading...
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.
Continue reading...
The collapse of Blackmore Bonds has once again laid bare the Financial Conduct Authority's institutional contempt for its objective of consumer protection.
Paul Carlier, an independent consultant most well known for blowing the whistle on dodgy FX dealings at Lloyds, contacted the FCA on March 2017 to warn them that Blackmore Bonds' high-risk investments were being missold by an unregulated introducer named Amyma.
Continue reading...
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.
Last year I counted over £1 billion in losses from unregulated investments marketed in the UK that went bust in 2019.
And the scary thing is that this was without a global financial crash.
Continue reading...Regular readers (hi Mum) will have noticed a slowdown in Bond Review's output lately.
This is due to a combination of less free time on my part, due to changed family circumstances, and a lack of developments in the unregulated investment sector that were interesting enough to be worth writing up.
Last week I reported on the FSCS' decision to compensate only 159 London Capital & Finance bondholders.
The decision to compensate only those who transferred stocks & shares ISAs to LCF, and not those who transferred cash ISAs, over a technical interpretation of the compensation handbook, has been a particular point of controversy.
Continue reading...
The hopes of most victims of FCA-authorised Ponzi scheme London Capital & Finance were dashed last week when the FSCS announced it would not compensate them on the basis of having received misleading advice.
It said that investors had merely been given incorrect information, which doesn't generate a liability that is covered by the FSCS' "protected business" rules.
That the FSCS has eventually taken this decision is disappointing for investors but ultimately not surprising. London Capital Finance was not authorised to give advice to retail investors, employed no qualified financial advisers, and its call centre staff were generally trained to avoid crossing the line from information to advice - as in any other non-advisory finance company. (Although some went off-piste and crossed the line into the "I'd tell my own mother to invest in this" school of advice.)
Continue reading...With the triumphant swagger of a county athlete who sees that he's the 1-10 favourite for tomorrow's race, drinks five pints of scrumpy in the pub the night before, and eventually staggers over the line an inch ahead of a 12-year-old farmer's son before vomiting into the trophy, FCA CEO Andrew Bailey has shrugged off the ongoing scandal of the FCA's failure to deal with unregulated investments and secured the appointment of Governor of the Bank of England.
Bailey must have been sweating a little as a succession of headlines about financial scandals old and new (minibonds, mortgage prisoners, vulture "restructuring" divisions) - with the FCA's conscious inaction as a constant theme - rolled through the presses as the Government deliberated its decision. But in the end, Bailey's "safe pair of hands" reputation won the day.
Continue reading...
Today marks the second anniversary of Bond Review’s first ever article, our review of the now sadly notorious London Capital & Finance.
So far Bond Review’s two years have seen:
