London Capital & Finance PLC filed for voluntary administration, appointing Smith and Williamson LLP as administrators following several regulatory actions against the company.
It comes after the U.K. Financial Conduct Authority launched a probe into the commercial lender, ordering it to withdraw promotional materials for so-called mini-bonds, as they were deemed "misleading, not fair and unclear." The regulator said the mini-bonds were being marketed as eligible to be considered individual savings accounts, which they are not.
The regulator also ordered the company not to dispose of or deal with its assets and to cease conducting all regulated activities.
Mini-bonds are unlisted debt securities, usually issued by small businesses to raise funds. They do not necessarily involve regulated processes so London Capital & Finance did not need to be authorized to issue them, but the regulator said companies approving a promotion for such instruments must ensure that it is in line with FCA rules.
The company appointed Finbarr O'Connell, Adam Stephens, Henry Shinners and Colin Hardman as joint administrators, the FCA said. The administrators will write to bond holders on how to make their claims.