The Financial Services Compensation Scheme has paid almost £2.7m to customers of London Capital & Finance in the first claims paid by the service.
In a statement today (February 17) the lifeboat scheme confirmed it had paid compensation to 135 investors in relation to 151 bonds invested following a transfer out of stocks and shares Isas, which is a regulated activity.
The FSCS first announced it would compensate these investors last month, but warned 283 bondholders who dealt with the LCF before it was authorised would not be entitled to compensation.
The mini-bond holder collapsed into administration in January last year having raised in excess of £237m from more than 11,500 investors over the course of two years.
In December a High Court heard almost £20m of bondholder funds was transferred to four men connected to LCF in the lead up to is collapse.
The FSCS is still reviewing thousands of claims for misleading advice, which it has previously confirmed could lead to some customers having valid grounds for compensation.
However the scheme said in January it expected many customers would not be eligible for compensation on an advice basis and a further update is expected in March 2020.
The FSCS has previously warned being given incorrect information on its own "does not constitute misleading advice".
Caroline Rainbird, chief executive at the FSCS, said: "We appreciate that this is a difficult time for the majority of LCF's customers who are still waiting to find out if they are entitled to compensation.
"FSCS is making progress in finalising its arrangements for reviewing advice claims and is committed to ensuring the process is as quick and as easy as possible for customers."
rachel.mortimer@ft.com
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