The UK’s financial watchdog has been accused of failing to intervene in a risky property investment scheme that lost investors millions.
MPs have called for inquiry into the UK’s Financial Conduct Authority (FCA) over its handling of the Blackmore Bonds scandal, that saw thousands of ordinary investors lose combined sums of £46m.
The MPs’ call comes as a documentary by BBC Panorama is tonight set to claim the FCA could have acted earlier in taking action, amid claims the watchdog may have worked to cover up evidence around the fact it failed to intervene, according to the BBC.
The FCA said it was not its duty to take action against the mini-bond investment scheme that collapsed in 2020.
The documentary claims the watchdog was repeatedly warned about Blackmore Bond’s sales tactics in 2017 and 2018.
The watchdog was first warned about Blackmore Bonds in 2017 after finance and banking expert Paul Carlier raised concerns about the investment company’s sales tactics due to overhearing Blackmore sales reps in the office next door.
Carlier later made a report to the FCA again in 2018 after learning the sales company was still in operation as he raised concerns with the watchdog’s then chief executive, Andrew Bailey.
An FCA spokesperson said: “We sympathise with investors who lost money through Blackmore. However, it is not true that we failed to act.”
“Our powers were limited as Blackmore was not a regulated firm and the issuing and distribution of mini-bonds isn’t a regulated activity.
“But we did take action where we could, including sharing intelligence with other agencies as early as 2017.”
“We have continued to look at the financial promotions – the area we do have regulatory powers over.”
“We shut down the website of a firm which was promoting the Blackmore products and in March 2019 took action that resulted in the regulated firm that had approved Blackmore’s latest financial promotions withdrawing its approval, preventing the further promotion of Blackmore’s mini bonds.”