The UK’s financial watchdog has come under fire by an independent commissioner for its handling of the £237m London Capital & Finance (LCF) investment scandal.
The Financial Conduct Authority (FCA) is reportedly at risk of censure from the financial regulator’s complaints commissioner, which investigates complaints against institutions like the FCA, the Bank of England’s Prudential Regulation Authority and the Payments Systems Regulator.
The watchdog had racked up more than 400 complaints about its management after LCF fell into administration in 2019.
Complaint’s commissioner Amerdeep Somal, who has been reviewing the complaints, has been critical of the regulator’s position, according to The Times.
Many of the complaints from investors circle the FCA’s decision to pay redress just a handful of those who had been shortchanged as a result – including many of the elderly who had put their life’s savings into LCF’s high risk bonds.
“The FCA’s approach to compensation in the LCF cases is unjustified and does not stand up to scrutiny,” the commissioner said in the 151-page preliminary report.
She recommended that the watchdog re-evaluate its decision to repay investors, which lifts the prospects for bondholders who originally missed out to win redress.
Complainants to the commissioner and the FCA have until mid-November to comment on Somal’s report, before will then publish the final version of her findings.
The FCA said: “This is not the Final Report and so it would not be appropriate for us to publicly comment on the Report in its preliminary stage.”