The Financial Conduct Authority (FCA) has condemned the London Capital and Finance Corporation (LCF) for unfair and misleading financial publicity of the mini-bonds.。

The Financial Conduct Authority did not consider it appropriate to fine the company as it was already bankrupt and in administration.。Doing so would only divert funds available to the administrator for the benefit of bondholders' creditors。

LCF uses financial promotions to market mini-bonds to retail investors。These promotions give a misleading depiction of mini-bonds, making them look more attractive than actual investments。Investors were not informed of the true nature of the mini-bonds, including the existence of hidden fees and the high-risk and unsustainable nature of the loans made by the LCF。

The FCA found that LCF used bondholders' money to fund seemingly independent comparison sites, comparing its mini-bonds to safer investments with lower returns。This has the effect of inducing retail investors to invest in LCF's high-risk products.。LCF also advertises mini-bonds as ISA-compatible, but this is not the case。

The LCF and those responsible for running the LCF may have been involved in deliberately defrauding bondholders, and the Serious Fraud Office is carefully investigating what caused most of the losses in the case.。

The Financial Supervisory Commission has implemented a major transformation programme to implement the recommendations made by Ms Elizabeth-Grosst following her review of the regulation of the LCF.。In addition, the FCA has taken action to make its authorization process more stringent, resulting in 1 in 4 applications being rejected as inadequate and its authorization being cancelled if the company does not use it。

The FCA is also investing £98m over three years to strengthen FCA's data analysis to better identify potentially problematic companies.。In 2020, the FCA banned large-scale marketing of speculative illiquid securities (including speculative mini-bonds) to retail investors.。