12th May

Glimmer of hope for London Capital & Finance investors


More than 11,500 investors in collapsed mini-bond firm London Capital & Finance (LCF) sweating on the potential total loss of the £236m they ploughed into the company’s doomed ‘Fixed Rate ISA’ (sic)  are being urged to register with a lifeboat fund that offers the hope of the return of at least some of their money.

 The entire sorry saga leaves few looking good - more details can be found in the following articles:

 SFO arrests four over London Capital & Finance collapse; FCA under pressure as investors stand to lose £236 m

Thousands of mini-bond investors face losses as London Capital & Finance files for administration

Hardly bathing in glory itself, when asked the FCA originally said The FCA said it was ‘unlikely’ investors would be protected under the Financial Services Compensation Scheme (FSCS) but it was ‘for the FSCS to determine’.

The Financial Services Compensation Scheme (FSCS) pays out for money lost with failed firms – up to £85,000 for investment claims.

Normally mini-bonds are not protected by the FSCS as the deals are unregulated, and are untradeable on an exchange, unlike retail bonds; however, way LCF staff sold the deals means some investors might be able to turn to the FSCS after all, as the way financial advice is given is regulated.

Many LCF customers will be buoyed by the fact that they are being urged to sign up for possible compensation.

The FSCS said it is ‘now investigating whether regulated activities were in fact carried out which might give rise to a claim’. LCF investors can register on the FSCS website, or by telephone or post

A spokesman said: ‘By registering with us they will get regular updates on our investigation and this will be the best way for them to hear whether we believe there are grounds for compensation.’

An alternative source of redress for LCF customers is through administrators Smith & Williamson, which is winding the company up; however back in March the administrators said investors might only get back 20% of their investment.

The Financial Conduct Authority and Serious Fraud Office are also investigating LCF.


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