London Capital & Finance plc (LCF)
London Capital & Finance plc (LCF), authorised by the FCA (FRN 722603), became one of the most significant mini-bond failures in UK history. The firm raised approximately £237 million from around 11,625 investors before entering administration in January 2019. Investors had purchased mini-bonds that were marketed as fixed-rate ISAs, a description the FCA later censured as misleading.
The FCA censured London Capital & Finance for its unfair and misleading financial promotions. Mini-bonds are not a regulated investment product, which meant that initially the FSCS could not step in under its standard rules. However, where LCF was found to have provided regulated financial advice to investors, compensation claims became possible. The FSCS paid over £58 million to eligible claimants under its rules.
The UK government established a separate compensation scheme to cover the broader group of bondholders who were not eligible under FSCS rules. By October 2022, when that scheme closed, £115 million had been paid to eligible bondholders in total. A Serious Fraud Office investigation into whether those responsible for running LCF were involved in knowingly defrauding bondholders is ongoing.
Issues / Why You May Have a Claim
Some LCF investors were recommended the mini-bonds by IFAs and financial advisers who were separately regulated. Where an FCA-regulated adviser recommended LCF bonds without properly assessing suitability, there may be a claim against that adviser. If you received advice to invest in LCF bonds and have not yet had your circumstances fully reviewed, please speak to our team.
