Emma RadmoreThe FCA has apologised to investors in 2 firms that issued mini-bonds. Basset & Gold plc and Basset & Gold Ltd were appointed representatives of three regulated firms and went out of business in 2022 and 2021 respectively. Most of the mini-bond proceeds had been invested in a high cost short term lender which went into administration in 2020.
Following the failure of the two companies, the FCA received several complaints about its conduct, and has decided to uphold complaints about the authorisation of one of the principal firms, B&G Finance Ltd, and the supervision of both it and the 2 AR firms. B&G Finance had become authorised in 2018, at which point it took over principal duties. It also went out of business.
The FCA is not upholding complaints about the authorisation of the 2 AR firms nor about its failure to stop the sale of the mini-bonds earlier or act on a specific warning it received. It had in fact taken several actions following complaints, and did take action that eventually resulted in suspension of a proposed issuance.
The FCA has concluded that it should have, and did not, consider all the information it had about B&G Finance Ltd and its related companies in the round and, as a result, it did not address issues collectively, when if it had done so that may have changed its engagement with the firms.
That said, the FCA does not believe this would have altered the outcome of its interaction with the firms or prevented the insolvency of the 2 ARs. So, because it was not the direct cause of investor loss it not going to pay redress for failures, but instead will pay £200 to each complainant because of the length of time it took to respond to complaints.
The FCA’s letter of response to complainants also notes that most investors have received redress through one of the other principal firms or through the FSCS, although a few had invested more than the FSCS limit.