Anybody reading the report will be appalled by the regulator’s performance in this case, given not just the number of complaints about LCF but the lack of joined-up thinking within the FCA. This was some years down the line; it happened after Andrew Bailey had taken over at the FCA. He knew there were problems right at the start, but there was no joining of the dots and there were the clear allegations of inappropriate conduct within LCF. The independent financial adviser who drew attention to it was a very competent person; he was not simply raising the issue saying, “I don’t like this company.”
The IFA was called Neil Liversidge. He wrote to the FCA setting out exactly what was going wrong with the designation of unsophisticated investors as sophisticated, the encouragement to class themselves as sophisticated, and where some of the investments were going. It was pretty clear what the problem was at LCF, and the FCA failed to act. That is simply unacceptable. That is why I welcome the compensation. However, it still has to be down to investors to make an educated decision. Certainly my constituent and others I have seen could see that this was not a Government gilt they were investing in; there were obviously some risks attached.