Spread-betting firm London Capital Group could be forced to pay £7.7m by the financial ombudsman. The regulator ruled that the company, which provides online gaming platforms for Paddy Power and PartyGaming, must repay £100,000 to clients who lost money on a third-party currency fund. The fund, provided by London Capital yet sold by Integrity Financial Solutions (IFS), reportedly lost investors thousands of pounds. A further 114 clients who say they lost money in the fund have come forward, bringing the claim total to approximately £7.7m. Hampshire-based IFS, part of parent company UK Integrity Group, was said to be under investigation from the Financial Services Authority over its sales practices, yet went into liquidation in October 2009.
Clients who had invested in the fund then turned to the Financial Ombudsman in an attempt to claw back lost cash. The new ruling comes after no action was initially taken against London Capital.