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