Investigation into collapse of London Capital & Finance launched

Financial Services | Latest News | Legal | South East

An independent investigation into the circumstances surrounding the collapse of investment firm London Capital & Finance (LCF) and the Financial Conduct Authority’s (FCA’s) supervision of the firm has been formally launched today.

The Economic Secretary to the Treasury, John Glen, has approved the FCA’s appointment of Dame Elizabeth Gloster to lead the investigation and has laid before Parliament the direction to initiate this work. Mr Glen has also announced that the Treasury will begin a wider policy review in response to the case, including a review of the regulatory regime for ‘mini-bonds’ and other non-transferrable securities.

The Economic Secretary, John Glen, said: “We urgently need to get to the bottom of the circumstances around the collapse of LCF. Dame Elizabeth will bring her vast experience and rigour to this important investigation, which will help ensure this type of thing doesn’t happen again. The Treasury will also be looking at how the current regime for these investments works, so customers are properly protected and the UK’s financial system can continue to be one of the safest in the world.”

Dame Elizabeth has had a distinguished career as a barrister and as a judge on the High Court and the Court of Appeal. As well as her current work as an international arbitrator, she has deep experience in commercial law and will bring expertise in financial services, insolvencies and regulation to the role.

She will look at how the FCA exercised its powers and whether it fulfilled its statutory objectives with respect to LCF. The FCA will report the findings of the investigation to the Economic Secretary, as well as the lessons it will take from those findings.

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4 Comments

  1. Shouldn’t take long to prove that FCA were totally negligent but how deep does she need to go????

    1. But be aware that this article constantly states how things will need to change in the future and what lessons need to be learned. If doesn’t say nor has the Treasury said that this investigation could/will lead to compensation claims being accepted if the FCA were found to be guilty of gross negligence in it’s affairs with LCF and protecting members of the public. I’m still hovering just below 50 percent thinking that the Treasury, the FCA and the UK Government will treat the investors of LCF as the guinea pig and allow us to sink as the dire warning for everyone this is what happens to mini bond investing and huge overhauls in the regulatory sectors of finance and new bills would take place asap insuring this doesn’t happen again to British people and scrap these one man band tin pot investment firms offering grossly high interest payments and unsecured bonds.

  2. This product has been available since 2012 and was being regulated by the Financial Conduct Authority!!
    What were they doing when all of this “Mis-Marketing and Mis-Selling was taking place??
    What is the point of a Financial Regulating Authority, that allows £236 million worth of “Blatantly Fraudulent Business” to be carried out before taking any action??
    All they did in my case was give me a false sense of security about this Company and its Product!!
    Obviously ALL the SCUM at London Capital and Finance that were associated with the destruction of so many “ordinary working peoples lives” by stealing their life savings!! Should be stripped of ALL their assets and thrown in jail to ROT!!
    But the people in charge of the Financial Conduct Authority!! Should take a good hard look at their involvement in this fiasco?? Maybe if they had been performing their role correctly?? the damage might not have been so CATASTROPHIC!!!

  3. Does anyone know how much of the £236 million, was invested “AFTER” London Capital & Finance were given their “Regulated Status” from the FCA. Also if , the FCA receive any sort of “Monetary Reward” from a company once their have be given the “Regulated Status” If this is indeed the case?? that the FCA was receiving a payment from LCF in return for this accolade?? Surely it should be the “Serious Fraud Squad” that carry out the investigation into their incompetents and possible criminal activities (receiving payment for favour!!) Instead of an internal investigation by friends or family members as seems to be the present situation (yet another white-wash) as was experience with the MPs “EXPENSES SCANDAL” (they all received a huge pay rise, after being caught stealing!!) I recently, attempted to lodge an official complaint against the FCA with the Financial Ombudsman in view of how incompetent they had been with regards to their handling of the LCF regulation procedures (it only took the administrators one or two weeks to realise that the marketing information was a SCAM) This is what the FCA gave LCF there “Regulated Status” against.
    But too my amazement!!! The Financial Ombudsman WOULD NOT ACCEPT MY COMPLAINT. Who would have believed that one Government department would have closed ranks to protect another government department?? (what do these people have to do before they are held to account) £236 million has been stolen

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