Wednesday, 12 June 2019 09:31

MPs call on FCA’s Bailey to resign over LCF mini-bond 'failings'

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A cross-party group of MPs has called on FCA chief executive Andrew Bailey to resign over what they see as regulatory failures over the collapse of London Capital & Finance.

So far 24 Members, including former Lib Dem leader Tim Farron and favourite for his party’s leadership, Jo Swinson, Green Party MP Caroline Lucas, Tories Sir Nicholas Soames and Phillip Davies and Labour’s Alex Sobel and Ian Murray, have endorsed a Parliamentary Early Day Motion calling for Mr Bailey to stand down.

The £236m mini-bond faltered at the start of the year and the Serious Fraud Office has so far made four arrests in connection with the mini-bond’s collapse.

 

The Early Day Motion’s wording read: “That this House notes the report of the administrators on the affairs of London Capital and Finance, which went into administration in January owing more than £230 million to more than 11,000 bondholders; further notes that the Serious Fraud Office and other crime agencies are investigating what the administrators described as highly suspicious transactions, which have resulted in much of the bondholders money being in the possession of or under the control of just four people, and that four people have subsequently been arrested; expresses alarm that documentary evidence has come to light which shows that the FCA was alerted to the activities of London Capital and Finance back in November 2015, but the FCA still went ahead and gave the firm a FCA-regulated accreditation on 7 June 2016, albeit for only the promotion part of their activities, which enabled London Capital and Finance to raise money from bondholders by marketing themselves as FCA-regulated in their promotional literature.

It added: “The Financial Conduct Authority has a major responsibility in allowing London Capital and Finance to raise more than £230 million from more than 11,000 people, many of whom are elderly and invested their life savings in the bonds; and believes that, as London Capital and Finance was an FCA-regulated company.”

Concluding, the motion called on Mr Bailey to go.

“The chief executive of the FCA should resign for presiding over the biggest financial scandal of recent years, which is likely, according to the administrators, to result in more than 11,000 bondholders losing all or most of their money,” it said.

 

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Last modified on Wednesday, 12 June 2019 09:34
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