InvestmentsFeb 2 2023

Some Blackmore claims will not be considered in NPI probe

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Some Blackmore claims will not be considered in NPI probe
Northern Provident Investments entered voluntary liquidation in August 2021
ByJane Matthews

The Financial Services Compensation Scheme has provided an update on the claims it will consider against Northern Provident Investments and said some investments in Blackmore Bond will be considered, while others will not.

In an update yesterday (February 1) the FSCS said it is continuing to assess an initial sample of claims received, but that it cannot confirm when individual claims will be processed.

The update outlined that claims from investors whose investments were facilitated by NPI as an ISA manager and/or those whose investments NPI provided custodial services for, will be considered.

This includes investments in Blackmore Bond, series 5 and series 6, Albermarle Capital, First Northbridge, Fluid ISA Bond 1, Quinshaw Group, Barbican Bond Co 1 and Access Commercial Investors 4. 

However the lifeboat scheme will not consider claims against NPI from investors who invested in Blackmore Bond series 1, 2, 3 or 4, as NPI was not involved with these bonds. 

The FSCS said as soon as its investigation is completed it will start assessing all outstanding claims.

In an update last week (January 24) the FSCS said it was in the final stages of its investigation.

What happened?

NPI operated a platform where retail customers could buy debentures and shares, which may be held in an innovative finance individual savings account or stocks and shares individual savings account. Some of these investments were mini-bonds.

NPI had approved financial promotions for issuers of mini-bonds and was linked to the Blackmore Bond scandal.

Blackmore Bond raised millions of pounds from investors to fund property developments between 2016 and 2018, but the company fell into administration in April 2020 owing £46mn to investors after several months of rocky waters in which it failed to pay interest due to bondholders.

In 2020, following the firm’s application to the FCA, the regulator imposed requirements on NPI for it to cease approving any further financial promotions.

As part of these requirements NPI placed a statement on its website that it would no longer be offering this service. 

In August 2021, the sole director and owner of NPI announced plans to enter liquidation. This was followed by a warning from the FCA that customers should remain alert to the possibility of being scammed

At the time the regulator said it believed there was a high risk of scammers trying to take advantage of the investment firm's customers.