London Capital and Finance

GDB2222

dunstonh wrote: »

If the FSCS pay those investors, then it will be retail consumers that end up footing the bill. The costs are always passed on.

Indeed, that's completely true. OTOH, if the 1 in 1000 figure is correct, we are only talking about say £200-500k. They could spend that on resisting payment.

To put this in perspective, they paid out £405m in 17/18, so a few hundred k is not going to affect the levy.

Malthusian

GDB2222 wrote: »

There were 11,000 investors. I'd guess that maybe 1 in 100 or 1 in 1000 made an enquiry with FSCS. If so, the numbers are so small that FSCS may just take the view they'll pay those cases.

Even if the FSCS representative had got it completely wrong, that wouldn't make the FSCS liable. The FSCS also isn't liable if it gives correct information and an investor misinterprets it.

I suppose you can argue that the FSCS was negligent in giving wrong information (or correct but misleading information) and should therefore be liable for that investor's losses. But in court the FSCS would have a decent argument that the consumer contributed to their own losses by not checking what they were told or asking specifically whether LCF minibonds were covered. Given that an 8% FSCS-guaranteed investment would be considered by most reasonable people to be "too good to be true".

If an IFA had told the investor what the FSCS told them, it would be a slam dunk victory for the investor at the FOS. But the FSCS isn't subject to the FOS. (Even if the IFA asked the FSCS and then copy and pasted that response onto the investor, that would be a slam dunk decision against the IFA. The IFA could, and should, have added the essential context and made it clear that LCF bonds weren't FSCS-covered.)

AnotherJoe

Malthusian wrote: »

I suppose you can argue that the FSCS was negligent in giving wrong information (or correct but misleading information) and should therefore be liable for that investor's losses.

Which in this case would be zero as they had already bought

jimjames

dunstonh wrote: »

If the FSCS pay those investors, then it will be retail consumers that end up footing the bill. The costs are always passed on.

I find it quite bizarre that some of these investors were prepared to independently contact the FSCS yet not actually bother reading the paperwork and website for LCF that clearly said they were not covered by the FSCS.

If people are prepared to look around and contact FCSC/FCA then they should have been looking at the literature on the LCF website too


https://damn-lies-and-statistics.blogspot.com/2018/12/london-capital-finance-fca-fscs-shutdown.html

masonic

jimjames wrote: »

I find it quite bizarre that some of these investors were prepared to independently contact the FSCS yet not actually bother reading the paperwork and website for LCF that clearly said they were not covered by the FSCS.

I don't find it surprising at all that some bondholders would attempt to lead the FSCS into stating bondholders had protection, even if those bondholders didn't think this was the case and/or had seen the statements to the contrary.

If you are desperate to get your money back, and there is even a slight chance you could hold the FSCS to their answer, it beats waiting for a 10% capital return in a year or two.

It's rather like concluding, in hindsight, that what you were told about the bonds might have been advice. Though I think the 'advice' argument stands more chance of being successful.

Reed_Richards

jimjames wrote: »

I find it quite bizarre that some of these investors were prepared to independently contact the FSCS yet not actually bother reading the paperwork and website for LCF that clearly said they were not covered by the FSCS.

Surely it is even more bizarre that whoever was responsible for the answers from the FSCS did not bother reading the paperwork and website for LCF?

Supercalafragalistic

https://imgur.com/user/supercalafragalistic1

AnotherJoe

Supercalafragalistic wrote: »

https://imgur.com/user/supercalafragalistic1

I think you got the reference wrong?

Supercalafragalistic

AnotherJoe wrote: »

I think you got the reference wrong?

Hi. Should take you to imgr. Press on image and its an email from fscs from back in aug, confirming lcf bonds were authorized by fca and covered by fscs. This was before the proverbial hit the fan.

AnotherJoe

Supercalafragalistic wrote: »

Hi. Should take you to imgr. Press on image and its an email from fscs from back in aug, confirming lcf bonds were authorized by fca and covered by fscs. This was before the proverbial hit the fan.

I'm seeing a 4 x 4 grid of pictures headed "whats popular right now".

None appear to be an email.