The government agency is now probing to know if regulatory activities executed have any basis for the claims for compensation.
The United Kingdom Financial Services Compensation Scheme (better known as FSCS) has told the London Capital and Finance clients to sign up for the latest details on its online platform. The agency’s responsibility is to see to the claims of those who are suffering from the fallout of LCF’s failure.
The agency stated that its focus is on making sure that LCF clients are always updated on the latest moves made regarding the investigations done so far to ascertain the validity of the claims for compensation. The body is also working with the Financial Conduct Authority (FCA), officials and attorneys on the issue.
Shocking Revelations
The items that the FSCS has checked showed that the LCF mini-bonds were not covered by the FSCS. But upon closer scrutiny of the business deals, materials and conversations of LCF with their customers, the FSCS is now proceeding with further probes to know if regulated activities were executed in relation to the claim being called for.
As it is now, the task and the legal work done by the FSCS lends credence to the notion that LCF’s main activity of issuing their mini-bonds in the United Kingdom is not under any protection but there are other cases that are worth probing even deeper. FSCS has there set its sights on establishing if there was any regulated counsel or other activities that could have led to the call for compensation. Analysts also insist that the agency needs to have a better comprehension of the type of relationship that is between Surge Financial Limited and LCF.
Complicated Case
An official with the FSCS stated that the case is a very complex one and that explains why the probe will take time before it can reach a reasonable conclusion. The official also expressed appreciation to the customers for their request for clarity while assuring them that the case is being handled with all the promptness that it truly deserves.
In the middle of April, an update on the case stated that London Capital and Finance Plc is in Administration. The same update went ahead to name officials from Smith and Williamson as the Administrators. On the part of the FSCS, it comprehends the fact that the firm released its own minibonds to the clients and that it was done with no advice. The agency is also aware of the fact that the minibonds were not transferable. This is an activity that is not under the purview of the Regulated Activities Order and is thus considered not protected by the FSCS. Because of this, even as the enterprise is in a state of insolvency, claims against it have been rejected.
If it so happens that the conditions one way or other led to really legitimate claims, the claims will be accepted against London Capital and Finance Plc. The customers will be duly informed if this happens, says the agency.
