FCA did betray investors and surrender to OneCoin Ponzi scheme, BBC podcast reveals

August 18, 2020August 17, 2020 ~ Brev ~ Leave a comment

Last November, following up on a Private Eye story, I asked whether the FCA had withdrawn a "scam warning" against the international billion-dollar Ponzi scheme OneCoin, after threats from notorious libel lawyers Carter-Fuck (more vulgarly known as Carter-Ruck).

As a refresher, OneCoin took in £4 billion from investors in exchange for "OneCoins", its made-up cryptocurrency. OneCoins were given an imaginary and ever-increasing value, which investors could cash out to a very limited degree via an exchange. These withdrawals were funded by new investors' money, in the classic Ponzi scheme fashion.

Treasury proposes raising hoop for unregulated investments to jump through

July 29, 2020July 28, 2020 ~ Brev ~ 13 Comments

On 20 July the Treasury proposed a tweak to the rules surrounding promotion of minibonds and other high-risk unregulated investments sold to the public.

Currently, any firm which is authorised by the FCA, no matter how obscure, can approve a financial promotion for an investment security, giving the investment the green light to be sold to the public.

It would not be fair to say that to be able to flog an unregulated investment security to the public, you need to cut out two tokens from a packet of breakfast cereal and send it to the FCA. What you need to do is hire someone else who at some point has sent in their tokens, and get them to approve your adverts.

FCA permanently bolts empty stable with extended minibond ad ban

June 23, 2020June 23, 2020 ~ Brev ~ 2 Comments

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.

Emboldened LCF investors secure crowd funding for FSCS legal challenge

April 30, 2020April 30, 2020 ~ Brev ~ 3 Comments

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.

FCA knew about misselling of Blackmore Bonds three years before collapse

April 29, 2020June 29, 2020 ~ Brev ~ 17 Comments

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.

Were Basset & Gold bonds risk-free after all?

April 14, 2020April 13, 2020 ~ Brev ~ 4 Comments

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.

Coronavirus to mean both bust and boom for unregulated investments

March 31, 2020March 28, 2020 ~ Brev ~ 12 Comments

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.

Slow news month?

March 16, 2020March 16, 2020 ~ Brev ~ 10 Comments

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.

FSCS employs magic-based logic to compensate 159 LCF bondholders

January 20, 2020January 20, 2020 ~ Brev ~ 5 Comments

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.

FSCS announces compensation for only 159 London Capital and Finance bondholders

January 14, 2020January 13, 2020 ~ Brev ~ 20 Comments

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.)