700 bondholders in LCF were paid under government scheme

abdelaziz Fathi

Britain’s Financial Services Compensation Scheme (FSCS) said today it has paid over £105 million in compensation to 8,500 investors in the collapsed mini-bond provider, London Capital & Finance.

London Capital & Finance

Of this figure, FSCS has contacted more than 700 bondholders with details of their compensation since the lifeboat system provided its last update in December. The last instalment was paid under a government’s redress scheme to reimburse eligible LCF victims.

FSCS said it has yet to contact around 700 bondholders and expects all eligible customers to receive their offer within two months. The letters will include details on what they need to do to accept the offer, the payment terms and some calculation examples.

The government-funded scheme is available to all individual bondholders who have not already compensated by the FSCS. Per the proposed terms,  the government would pay 80 percent of the compensation, up to a maximum of £68,000, that LCF clients would have received if they were eligible for FSCS protection.

More becoming eligible for compensation

Those who still want to receive their principal investment in full can reject the offer when the FSCS contacts them by April 20, 2022. Approved claimants are expected to get their payments later this month.

Around 12,000 investors suffered major losses following the £236 million collapse of the mini-bond issuer in 2019. However, more than 3500 bondholders are still waiting to hear if they have any chance of getting their money back.

The Financial Services Compensation Scheme paid compensation to investors who relied on claims for misleading advice in the collapsed mini-bond provider. The fund said it was aware that some customers were advised by independent financial advisers to transfer existing assets to the firm that was put into special administration in May 2017.

To kickstart with the process, the FSCS reviewed almost a million pieces of evidence in order to determine which customers had been given misleading advice by LCF. It has also gained access to an additional 100,000 emails held within LCF’s email server, which extended the time frame to complete the process beyond the original deadlines

Read this next

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”

Industry News

Morgan Stanley launches ETF platform with six ESG-focused products by Calvert

“These new ETFs will resonate strongly with investors who seek competitive investment results while promoting positive change and supporting companies that are leaders in improving long-term shareholder value and societal outcomes.”

<