Investment Scandal Victims Could Receive Further Compensation Following Report

There have been calls for further compensation to victims of the London Capital Finance scandal, after an independent commissioner deemed the Financial Conduct Authority’s approach to the issue as flawed.

Investment Scandal Victims Could Receive Further Compensation Following Report

The £237 million scandal, which hit the headlines in 2019, saw more than 14,000 small investors lose out.

Commissioner Amerdeep Somal published the report on the FCA’s handling of the situation, which concluded that the regulator should review the cases again, as their initial approach does “not stand up to scrutiny”.

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She said that she received 440 complaints regarding the FCA’s handling of LCF’s collapse.

A special government scheme had previously paid out £105m to around 8,000 people involved in the situation, while £57.6m in redress was also paid to 2,871 investors by the Financial Services Compensation Scheme.

The FCA also paid just over £34,000 to four people who had believed their investment was safe after receiving direct communication from the regulator.

London Capital Finance went into administration in January 2019 and was declared as “failed” 12 months later.

Prior to that, the FCA had ordered the company to remove misleading marketing material, which included suggestions that LCF’s bonds were ISA-eligible, which was untrue.

The FCA does not have to follow any recommendations from the report but said it will publish a response before a March 15 deadline.