Investors in collapsed peer-to-peer lending platforms have urged the City regulator to hire “a very different” kind of chair when replacing outgoing Charles Randell following several scandals under his watch, including Lendy and London Capital & Finance (LCF).
Randell, who became chair of the Financial Conduct Authority (FCA) and Payment Systems Regulator in April 2018, will step down from both in Spring 2022 and has asked Chancellor Rishi Sunak to start the process of appointing his successor.
Investors in defunct alternative finance platforms Lendy, Collateral, MoneyThing, London Capital & Finance and Blackmore Bond all signed a letter to Sunak calling for a change in leadership and to consider diversity when hiring a replacement chair.
Other signatories included: Lisa Taylor, a representative of the Lendy Action Group, Steve Robinson, an investor in Collateral and member of the Collateral Action Group, and Rosco White, who had invested in Collateral, Funding Secure and MoneyThing. Andy Agathangelou, founder of The Transparency Task Force, which aims to promote reform and drive up levels of diversity within financial services, also signed the letter.
The letter said that a “very different kind of chair” is required to ensure that the transformation programme promised by chief executive Nikhil Rathi amounts to a genuine step change in the organisation’s proactivity levels and culture.
“The resignation of Charles Randell provides an opportunity to introduce some much-needed diversity of thinking to the FCA’s leadership team at a time when the regulator’s competence and integrity are rightly in question,” the letter said.
“Not only has the organisation’s handling of two investment schemes – London Capital & Finance plc and The Connaught Income Fund Series 1 – been found inadequate, but there is a lengthy charge-sheet of further cases in which the FCA’s performance is suspected of having been as bad, if not worse.
“These include: Woodford Equity Income Fund; Blackmore Bond; Lendy; Funding Secure; Collateral; PremierFX, mortgage prisoners and many more.
“Both Charles Randell and his predecessor, John Griffith-Jones, previously led professional services firms that served the financial services industry and as a consequence have been accused of having conflicts of interest.
“Whether they were conflicted is a matter of debate but there can be no doubt that neither used his term in office to remedy long-standing and widely acknowledged deficiencies in the regulator. The harsh reality is that thousands of people have lost life-changing sums of money from their investments due to one catastrophic regulatory failure or another.
“To be blunt, the FCA is consistently failing to achieve one of its most important objectives, to give appropriate consumer protection.”
The Treasury hires the chair of the FCA and the letter said the signatories do not want to undermine this right but want the membership to be on board with the appointment.
“We do not seek to undermine the HMT’s statutory right to appoint a new chair to the FCA but propose that it works with us to ensure that at least half the membership of the appointment committee reflect consumer, rather than producer, interests,” the letter said.
“We also suggest that the new chair’s job description reflects consumer protection as a top priority.”
During Randell’s time as FCA chair, the regulator has introduced new regulation for the peer-to-peer lending sector, supported the financial services sector through Brexit and aided consumers and businesses during the Covid crisis.
The Treasury has been contacted for comment.