An investigation has been launched into the auditors of collapsed mini-bond provider London Capital & Finance (LC&F).
Accountancy regulator the Financial Reporting Council (FRC) has launched three separate inquiries into Oliver Clive & Co, PwC and EY, all of which audited and signed off the firm’s accounts in 2015, 2016 and 2017 respectively.
LC&F collapsed in 2018 after the Financial Conduct Authority (FCA) ordered it to withdraw its promotional material on the basis that the marketing of its bonds was “misleading, unfair and unclear.”
This left more than 11,625 investors at risk of losing a combined total of £240m.
Smith & Williamson LLP was appointed joint administrators of LC&F on 30 January 2019.
Investigations have since found suspicious transactions involving a small group of connected people which have led to large sums of the LC&F clients’ money ending up in their personal possession or control.
This has raised questions about why auditors did not spot any discrepancies.
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The Serious Fraud Office launched an investigation into LC&F last year and there is also an independent probe into the FCA’s oversight of the collapsed firm.
The inquiry into the FCA is led by Dame Elizabeth Gloster, the former appeals court judge.
She warned earlier this month that she will not complete her investigations by a deadline of next month and has suggested a new date of 30 September.
The FCA has since proposed to make its temporary ban on the mass marketing of speculative mini-bonds permanent.