London Capital and Finance

AnotherJoe

10 pages? :eek:

If you take that long to state your case, its got more holes than a signpost in Texas.

The IFA who initially raised the alarm to FCA, his original complaint was only a few paragraphs. Succint and to the point.


10 pages says to me its going to be full of loophole seeking and unnecessary extraneous detail and sob stories.

Supercalafragalistic

An FSCS spokeswoman tells Money Marketing: “We are sorry for the confusion this may have caused some LC&F customers.”
Nicky Morgan tells FCA to investigate regulated status after collapse of mini-bond firm
FT cites one particular instance of an investor recieving an email from the FSCS last August stating:
“London Capital & Finance Plc are authorised by the Financial Conduct Authority and therefore covered by the FSCS up to the compensation limit of £50,000.”
The email fails to mention the fact LCF’s unregulated activities, such as issuing minibonds, are not not covered by the mentioned limit.
The FSCS acknowledges its incomplete picture may have led to confusion and apologised.

AnotherJoe

Supercalafragalistic wrote: »

An FSCS spokeswoman tells Money Marketing: “We are sorry for the confusion this may have caused some LC&F customers.”
Nicky Morgan tells FCA to investigate regulated status after collapse of mini-bond firm
FT cites one particular instance of an investor recieving an email from the FSCS last August stating:
“London Capital & Finance Plc are authorised by the Financial Conduct Authority and therefore covered by the FSCS up to the compensation limit of £50,000.”
The email fails to mention the fact LCF’s unregulated activities, such as issuing minibonds, are not not covered by the mentioned limit.
The FSCS acknowledges its incomplete picture may have led to confusion and apologised.

The FT fails to mention the investor in question had already purchased the bonds

GDB2222

masonic wrote: »

The correct understanding is that there is a claim route for actual regulated financial advice, but not for a conversation that was merely thought to be regulated advice by the recipient, or a conversation that could have been mistaken for advice as judged by a knowledgeable third party. But, it has been shown in other cases that the FSCS may decide to pay out even when they have no grounds to do so.

Apparently, the FSCS do not agree:

"An FSCS representative had clarified that because the firm was FCA-authorised, it would not matter if it lacked the appropriate regulatory permission and if a particular regulated activity, such as advising, was actually carried out in practice compensation could potentially be offered. "

masonic

GDB2222 wrote: »

Apparently, the FSCS do not agree:

"An FSCS representative had clarified that because the firm was FCA-authorised, it would not matter if it lacked the appropriate regulatory permission and if a particular regulated activity, such as advising, was actually carried out in practice compensation could potentially be offered. "

That statement doesn't disagree with my post. If it can be shown that LCF gave regulated financial advice, even if they carried on this regulated activity without authorisation, then this might be true. I say might be because I don't think this scenario is covered in the FSMA. However, it has to be actual regulated financial advice, not financial guidance or something else mistaken for regulated advice.

If LCF is deemed to have carried on this regulated activity without authorisation, then that would open the door to criminal conviction of those involved in this activity, which might be a more direct route to extract money for bondholders than a personal liability claim made the Administrators against the directors. However, there isn't any indication that the FCA is pursuing this avenue, at least not yet.

A more likely scenario is that no advice was given, only guidance.

jaybeetoo

Compensation possible for London Capital & Finance investors


https://www.bbc.co.uk/news/business-48235410?intlink_from_url=https://www.bbc.co.uk/news/business/your_money&link_location=live-reporting-story

dunstonh

jaybeetoo wrote: »

Compensation possible for London Capital & Finance investors


https://www.bbc.co.uk/news/business-48235410?intlink_from_url=https://www.bbc.co.uk/news/business/your_money&link_location=live-reporting-story

BBC repeating other articles that were posted about a week ago. Nothing new here.

It also has an error in it:
The FSCS was set up by the government to protect consumers if UK regulated firms went bust.

That isnt what the FSCS does.

jaybeetoo

The Times is joining in https://www.thetimes.co.uk/article/compensation-scheme-could-pay-up-to-85-000-86t9q55l9?shareToken=b28ac97f67319b5014932beba241d696

Supercalafragalistic

Does this mean that the 4 people who were arrested will now not have to pay?

masonic

Supercalafragalistic wrote: »

Does this mean that the 4 people who were arrested will now not have to pay?

"Will NOW not have to pay?" I'm not aware of any action brought against those individuals that would make them responsible for paying. They have been politely asked to return the monies originating from the scheme that ended up in their bank accounts, but that's it.

Clearly there is some misunderstanding regarding the FSCS "news". In fact, nothing has changed in the last few months. The theoretical possibility that the FSCS could step in if bondholders received regulated advice before buying was discussed in this thread ages ago. It is still a theoretical possibility and as far as I'm aware none of the 11,605 bondholders have so far been able to demonstrate they invested in the bonds under advice and no complaints regarding unsuitable advice have been upheld.

...And the other avenue, namely that the investment was not in fact an unregulated mini-bond and therefore might be reclassified as a regulated investment (rather than an unregulated scam), is, IMHO pure fantasy, and in any case a long way from being established.


Whether the FSCS pays compensation for zero, one, several or all bondholders, this would not affect the actions of the administrators, who would still seek to maximise recovery of the money owed, including taking legal action against individuals who could be held personally liable. Any such money recovered on behalf of compensated bondholders would be repaid into the compensation scheme.