Last week, the Financial Conduct Authority (FCA) censured the minibond firm London Capital Finance (LCF) for ‘unfair and misleading’ promotions that made its bonds ‘appear a far more attractive investment than they were’.
LCF is the company set up by Tunbridge Wells businessman and former Conservative Association chairman, Simon Hume-Kendall. As the firm is insolvent it has not been fined by the FCA, however the Serious Fraud Office is currently investigating whether to charge those who ran LCF with fraud.
Mr Hume-Kendall, along with his wife Helen, businessman Spencer Golding of Crowborough, former LCF CEO Andy Thompson, Hadlow Down businessman and former London Oil & Gas director Elten Barker were at the heart of the scandal, which saw the Tunbridge Wells firm collapse in January 2019 and £237million of funds lost.
As the Times previously reported (February 20, 2022), over 11,000 bondholders, lost investments including pension pots and life savings. A scheme was set up by the Treasury to refund 80 per cent of LCF bondholders’ initial investments. The compensation was paid by UK taxpayers due to LCF not being regulated by the FCA.
In the findings, the FCA said people were not warned about the high risk involved or about hidden charges.
The FCA’s report, published on October 13, also said that the problems at LCF ‘ran far deeper’ than unclear and misleading marketing. The LCF’s administrators’ first report in March 2019 stated that: “There are a number of highly suspicious transactions involving a small group of connected people which have led to large sums of the Bondholders’ money ending up in their personal possession or control.”