Nicky Morgan, chair of the U.K. Treasury Select Committee, urged the Financial Conduct Authority to look into complaints by London Capital & Finance PLC investors who face losing most of the £236 million they invested in the company, the Financial Times reported March 19.
London Capital & Finance is the subject of a criminal probe by the Serious Fraud Office over its marketing of so-called mini-bonds as fixed-rate individual savings accounts to investors.
In a letter to the FCA and the Treasury, Morgan has called for a statutory investigation into regulatory failure, which would assess any missteps taken by the FCA as well as whether rules around the bonds in question are clear enough, the report noted.
"The FCA board should set out whether firms are using their FCA authorization in a way that may be misleading to consumers, whether consumers need greater clarity on what such an authorization does to protect them, and whether mini-bonds should now be regulated," Morgan reportedly said.
The company filed for voluntary administration in December 2018 after the FCA ordered it to cease conducting all regulated activities and to withdraw promotional materials for the mini-bonds that were deemed "misleading, not fair and unclear."