On Thursday 17th, Dame Elizabeth's Gloster's long awaited report into the £237 million collapse of London Capital & Finance was published.
The report is damning and makes very clear that the FCA bears a large part of the blame for LCF accumulating, and losing, as much investor money as it did.
Continue reading...
Today marks the third anniversary of Bond Review's first ever article, our review of London Capital & Finance, which went on to collapse owing £240m to investors.
Continue reading...Last November, following up on a Private Eye story, I asked whether the FCA had withdrawn a "scam warning" against the international billion-dollar Ponzi scheme OneCoin, after threats from notorious libel lawyers Carter-Fuck (more vulgarly known as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.
Continue reading...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.
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.
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.
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.
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.
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.
