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Thousands of investors who lost millions to the London Capital & Finance (LCF) mini-bond scam may have the ability to claim reimbursement from a government-backed hedge plan.
The bondholders have received a judicial review opposing the Financial Services Compensation Scheme (FSCS), challenging its resolve to grant repayment to only a handful of victims of the CFL scam.
The FSCS ruled in January that 159 of the roughly 11,500 LCF bondholders would be eligible for compensation.
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LCF has sold high-risk mini-bonds to investors, but incorrectly advertised them as ISAs, which qualify for FSCS coverage. The FSCS ruled that since those bonds are in fact ISAs, they are eligible for indemnity coverage.
The courts have now allowed several CFL bondholders to challenge this ruling, which could open the door to payment for thousands of victims.
“We are very pleased that the Court has granted permission to hear this case and that the pursuit of justice and praise from London Capital & Finance (LC&F) investors continues,” said Thomas Donegan, spouse at the law firm Slistenman & Sterling, who is handling the case on a pro bono basis.
“We are confident in our arguments and look forward to presenting them to the Court. “
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LCF raised £ 237 million ($ 309. 7 million) through the promotion of sub-prime bonds for savers before collapsing in January 2019. Directors warned investors that they can only reach 25% of their cash and now they are suing thirteen other people related to the company for alleged fraud. . Array The UK Serious Fraud Office (SFO) is investigating.
A date for judicial review has yet been set.
“A positive end result in this case will have a genuine effect not only on their lives, but also on the lives of many other investors who have lost significant investments following the collapse of London Capital & Finance,” said Jonathan Swil. Shearman And Sterling attorney.