MPs from across the political spectrum have backed a call for the chief executive of the FCA, Andrew Bailey, to step down following the collapse of mini-bond firm London Capital & Finance.
The incident saw over 11,000 bondholders lose more that £230m.
An early day motion put forward on 1 April states:
“This House… believes that, as London Capital and Finance was an FCA-regulated company, 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.”
The primary sponsor of the EDM is Labour MP for Birmingham, Hall Green, Roger Godsiff. Along with five more sponsoring MPs from Labour, the Democratic Unionist Party and Conservatives, there are 10 MPs, including from the Green Party and Liberal Democrats, who have signed in support of the EDM.
Its investigation will also cover, whether the existing regulation of mini-bonds protects retail investors adequately.
LC&F fell into default in January, a month after the FCA issued it with an order to take down promotional material of the bonds, ruling they were “misleading, not fair and unclear”, as they were not eligible for Isa status as claimed.
The early-day-motion states the regulator seems to have failed to act on warnings about the firm:
“This House… expresses alarm that documentary evidence has come to light which shows that the FCA was alerted to the activities of London Capital & 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 & Finance to raise money from bondholders by marketing themselves as FCA-regulated in their promotional literature.”