The UK's accounting watchdog has launched three investigations into the audits of scandal-embroiled London Capital & Finance.
The Financial Reporting Council today (June 24) announced it was investigating three audits carried out by Oliver Clive & Co, PwC and EY.
The probes relate to audits carried out between 2015 and 2017, years before London Capital & Finance fell into administration in January 2019 owing more than £230m and putting the funds of more than 14,000 bondholders at risk.
The company signed clients up to fixed-rate Isas promising 8 per cent interest, with investors' capital then invested into mini-bonds used to issue loans to small businesses.
An investigation into the Financial Conduct Authority's handling of the mini-bond scandal is ongoing but has faced delays as a result of the coronavirus pandemic.
A spokesperson for PwC said: "We will cooperate fully with the FRC. We are committed to delivering consistently high quality audits and in June 2019 introduced a major ongoing programme to enhance audit quality across the firm."
EY and Oliver Clive & Co have been approached for comment.
The costs of compensating clients of London Capital & Finance was the driving force behind an increased Financial Services Compensation Scheme bill for advisers this year, with an extra £44m set aside to meet claims for misleading advice against the collapsed mini-bond provider.
Last week the regulator revealed plans to make permanent its temporary ban on the marketing of mini-bonds to retail investors amid concerns over "unexpected and significant consumer loses".
The ban is intended to protect against the most "complex and opaque arrangements" where funds raised are used to lend to a third party, buy or acquire investments, or to buy or build property.
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