Round 11,600 folks had invested a mixed £237 million with the agency earlier than it went into administration final yr. LCF was authorised the Monetary Conduct Authority (FCA), nevertheless it primarily bought mini-bonds, which are not regulated, so buyers have struggled to get their a refund after the agency’s collapse.
However an unbiased investigation led Dame Elizabeth Gloster has now concluded there have been “vital gaps and weaknesses” within the insurance policies of the FCA, which may imply bondholders did not get the extent of safety they have been entitled to anticipate.
As such, the Treasury has in the present day stated it should arrange its personal scheme to find out whether or not some bondholders might be given further one-off compensation funds in sure circumstances – though it is unclear how precisely this scheme will work. It is also set out the primary channels buyers can use to try to get compensation.
Each the FCA and the Authorities have additionally accepted suggestions from the report, together with consulting on whether or not to manage merchandise resembling mini-bonds. See our Are your financial savings secure? information for assist defending your money.