FCA and SFO continue to investigate London Capital & Finance

Maria Nikolova

The Financial Conduct Authority is investigating multiple lines of enquiry concerning individuals and companies connected to LCF.

The UK Financial Conduct Authority (FCA) has earlier today posted an update regarding the investigation into London Capital and Finance (LCF). Customers of the failed firm will hardly be impressed by the update, as the regulator simply states that, together with the Serious Fraud Office (SFO), it continues to investigate actions relating to the sale of mini-bonds and ISA bonds by LCF.

The FCA says it is investigating multiple lines of enquiry concerning individuals and companies connected to LCF. To date, the regulator has obtained tens of thousands of documents and is undertaking a thorough and forensic review of those. Thousands of hours have been spent on the investigation by FCA enforcement staff since it was opened and thee watchdog is actively pursuing all reasonable lines of enquiry.

The regulator notes that this is a current criminal investigation and for legal reasons it may not be able to give the public much information.

The UK regulator is introducing a ban on the mass marketing of speculative mini-bonds to retail customers. The restriction will come into effect on January 1, 2020 and will last for 12 months while the FCA consults on making permanent rules.

The restriction means that unlisted speculative mini-bonds can only be promoted to investors that firms know are sophisticated or high net worth. Marketing material produced or approved by an authorised firm will also have to include a specific risk warning and disclose any costs or payments to third parties that are deducted from the money raised from investors.

Mini-bonds have drawn widespread attention after the collapse of LCF, which has left approximately 14,000 consumers who had invested in its mini-bonds at risk of losses.

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