The Treasury Committee has written to Treasury and FCA asking for an investigation into the events at London Capital and Finance. FCA had told the firm to withdraw its promotional materials for its mini-bonds in December 2018 as it found them to be misleading, not fair and unclear. But the Treasury Committee feels there is a bigger issue, which is how the regulatory system led to the potential harm to consumers that has now resulted from the firm’s failure – and FCA had commented on the undue prominence in promotions of the firm’s regulated status, despite the fact that the mini-bonds were not protected by FSCS and the firm did not need authorisation to issue them. Nicky Morgan said that at the very least the FCA Board should set out whether firms are using their FCA authorisation in a way that may mislead consumers as to the protection they have, and whether mini-bonds should now be regulated. She also said that if FCA does not carry out an investigation, the Committee will be asking Treasury to consider requiring it to do so.
Separately, SFO has opened an investigation.