The essential question is whether customers were actively advised that mini-bonds were a suitable investment.
LCF paid Surge Financial £58m to develop its online comparison sites promoting mini-bonds.
Given Surge’s reported turnover of £50m on last year, the extent of Surge’s involvement may be of interest to those investors unable to gain compensation from the FSCS.
For investors in LCF, the ban on retail sales of speculative mini-bonds comes too late.
It is welcome news that robust action is proposed against those responsible for such devastating losses.
Closer scrutiny of the actions of regulatory bodies which are supposed protect people is also welcome.
However, the mini-bond scandal is not over yet.
Mini-bond investment firm Asset Life - which has links to LCF - went into administration in July 2019, with several million pounds missing, leaving 500 investors out of pocket.
The devastating consequences of the ineffective regulation of mini-bond schemes are now clear.
At last, it seems that the government and regulators are determined to intervene robustly in the sector.
Yet the warning signs were there for years. The real shame is that it took a scandal involving almost a quarter of a billion pounds of ordinary people’s money to prompt effective action.
Bambos Tsiattalou is the founding partner of Stokoe Partnership Solicitors
