Institutional investors are considering legal action against the FCA after the regulator disclosed market sensitive information, resulting in a sell-off of insurance company shares.
According to the FT “half a dozen of the City’s biggest investors” have consulted a law firm about potential compensation claims against the regulator.
This comes after a report in The Daily Telegraph on 28 March suggested the FCA is concerned legacy customers are locked into poor investments by steep exit fees, and insurers may be “exploiting” them by levying large fees to subsidise other parts of the business.
L&G called on the FCA to bring forward the publication of the business plan “in view of the disorderly market.”
The regulator was forced to issue a clarification statement at 2.30pm explaining the scope of the review in more detail. At 6.30pm, the FCA issued a further statement that it would carry out an investigation into its handling of the issue.
Chancellor George Osborne subsequently wrote to FCA chairman John Griffith-Jones expressing his “profound concern” at the way the regulator had handled the announcement. In response, Griffith-Jones said the FCA will do “everything possible” to address the harm caused by the leak.