Compensation hope for London Capital and Finance investors


The fka is in the spotlight (pa)
The fka is in the spotlight (pa)

Investors who lost money after the failure of London Capital and Finance (LCF) have been given new hope they may be due to compensation.

More than 11,000 senior investors invested money in the administration company at the end of January after netting £ 236 million through advertising tax-free individual savings accounts.

The Financial Services Compensation Schemes (FSCS) previously said that the losses would not be covered by the mini-connection scheme.

But the body is looking at "whether it is regulated advising, arranging or other activities that can trigger our compensation".

In a statement, the FSCS said: "The promotional materials we reviewed have stated that the LCF mini-bonds are not FSX protected.

"After a further review of LCF business practices, investment materials, and calls recorded with investors, FSX is investigating whether regulated activities are being carried out, which could give rise to a demand".

LCF was a high risk bond scheme with an interest rate of 8% and the serious fraud office opened an investigation into the company.

Administrator Smith & Williamson found that money invested in the fixed company ended up in the hands of a small group of people, including his main executive.

Press Association

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