Financial Conduct Authority  

Investigation blasts 'wholly deficient' FCA handling of LCF

The FCA accepted all of the report's nine recommendations, with FCA chairman Charles Randell admitting there were a "number of things" the regulator could have done better in its supervision of London Capital & Finance. The regulator will work with the Treasury and wider government in relation to the remaining four recommendations.

Mr Randell added: "We accept all the recommendations that have been made to the FCA and we are profoundly sorry for the mistakes we have made.

"The collapse of LCF has had a devastating effect on many investors and we will do everything we can to conclude our investigations as quickly as possible and support the recovery of further funds for investors.

"These reports not only highlight operational mistakes; they also indicate that the measures we introduced may not have been as effective as we wanted and challenge the balance that we struck at that time."

One-off compensation for investors 

John Glen, economic secretary to the Treasury, said he welcomed the FCA's apology and its commitment to implementing all of the report’s recommendations.

Mr Glen added: "LCF’s failure had a significant impact on the bondholders who have lost their hard-earned savings and the government will take forward the report’s recommendations to ensure our regulatory system maintains the trust of the consumers it is there to protect.

"Taking into account the various channels through which people affected can seek compensation, the government will also set up a scheme to assess whether there is a justification for further one-off compensation."

rachel.mortimer@ft.com 

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