The adviser who raised the alarm about London Capital & Finance in 2015 said he has been "brushed off" by the Treasury Select Committee after he wrote expressing concern that the industry should not be left with the bill.
Neil Liversidge, principal of Yorkshire-based West Riding Financial Solutions, wrote an open letter to TSC chairman Mel Stride earlier this month, stating the regulated industry should not be left with the bill for such failures.
However, his letter received a response from the TSC of only two paragraphs, which Liversidge said seemed to "brush off" the main thrust of his letter; namely because LCF was an unregulated investment, not advised on by IFAs, regulated financial services firms should not have to cough up.
The TSC's letter to Liversidge, seen by FTAdviser, says: "The Treasury Committee’s inquiry into the Financial Conduct Authority’s regulation of London Capital and Finance remains ongoing.
"The Committee has held two evidence sessions to date, with further sessions planned in the coming weeks."
The next session is scheduled for March 1 at 3.30 pm, with Nikhil Rathi, chief executive of the FCA, and chairman of the regulator Charles Randell.
The letter also told Liversidge: "If you would like to follow these sessions, please refer to our website for updates."
Liversidge responded: "Thank you for relaying to me the committee’s brush-off. If they want to follow my comments, they can check my Twitter feed and Facebook page."
In his original letter, the Yorkshire-based adviser said he was willing to give evidence to the TSC as part of its investigation into the failure of LCF.
HM Treasury first requested the independent LCF investigation in May 2019 after the mini-bond provider collapsed owing more than £230m and putting the funds of some 14,000 bondholders at risk.
Earlier this month Andrew Bailey, the former chief executive of the Financial Conduct Authority, told MPs he was not aware of the now scandal-embroiled LCF until "pretty much the point at which it was closed down".
This is despite Liversidge raising the alarm in 2015, along with other equally concerned advisers, about the unsuitability of the investment - fears which proved real.
By 2020, the investors and their solicitors had taken their case against the LCF trustees to the High Court.
Following Bailey's appearance, however, Liversidge said he was "pretty clear" as to where the inquiry was going.
He said: "From what I have seen so far, the aim is to castigate the FCA and order it to compensate all the LCF bondholders in full, no doubt with interest.
"That way the Treasury can neatly pass the buck to the financial services industry without making it too obvious.
"The rules have already been stretched to breaking point by the Financial Services Compensation Scheme, who have shelled out a load of our money to people who took no advice whatsoever.