Prime minister Boris Johnson has been urged to focus on regulatory failures in the financial services sector with renewed calls for an inquiry into the Blackmore Bond scandal.
In an open letter, Andy Agathangelou, founder of the Transparency Task Force, warned the prime minister of several regulatory failures in the financial services sector and suggested action should be taken soon.
It came after the Transparency Task Force held an event last week (March 18) looking at the Blackmore Bond scandal and why it matters for the wider industry.
As part of the event Paul Carlier, a whistleblower on the Blackmore Bond failings, gave his views on the scandal as well as other similar incidents, such as London Capital and Finance.
Blackmore Bond raised millions of pounds from investors to fund property developments between 2016 and 2018, but the company fell into administration in April last year owing £46m to investors after several months of rocky waters in which it failed to pay interest due to bondholders.
According to Carlier, he warned the Financial Conduct Authority about Blackmore Bond three years before it collapsed.
In his letter, Agathangelou said Carlier’s testimony suggested the future of the financial services sector is in “jeopardy”.
He said: “The financial services sector is expected to be a stellar performer in our country’s future, providing an abundance of profits, well-paid careers and reputational integrity on the all-important world stage. That’s the future we all want and we should be able to look forward to it with a sense of national pride.
“However, I fear that if only a fraction of the sentiment expressed by Carlier and the highly credible testimony-givers at the event in question were true, the future success of that industry is in jeopardy - in financial services, reputational integrity and consumer confidence is everything, be that on an individual, corporate or national level.”
Earlier this month (March 8), Conservative MP Peter Gibson called for an independent report into the Blackmore Bond scandal to investigate exactly what went wrong while criticising the regulator as not being “fit for purpose”.
He said parliament should be prepared to scrutinise more closely the work the FCA is doing saying it is currently “not functioning as parliament wishes”.
Agathangelou said: “[...] reports of system-wide failure from peers and even the FCA itself feeling the need to apologise for its own poor performance, all point to one thing - our country has a problem.
“Beyond the obvious need for a swift and fully independent investigation into Blackmore Bond, it is not for me to propose what should be done.
“I just know it to be my civic duty to let the captain of the ship know that there’s an iceberg ahead.”
Also appearing at last week’s event, Baroness Susan Kramer said “we have to put iron in the spine of the FCA”.
She also said she wants to see an office to protect whistleblowers, and a duty of care imposed on financial service providers.