LONDON, Jan 9 (Reuters) - Britain’s financial industry compensation body said on Thursday it can only help 159 of a total 11,600 investors holding bonds issued by defunct investment firm London Capital & Finance.
The Financial Services Compensation Scheme (FSCS) said it will protect 159 bondholders who switched from stocks and shares to the unregulated LCF bonds.
The so-called “mini-bonds” were issued to raise funds for small firms.
“Whilst FSCS maintains that the act of issuing mini bonds is not a regulated activity, and is therefore not something FSCS protects, FSCS has concluded there will be some customers who were given misleading advice by LCF and have valid claims for compensation as a result,” the FSCS said in a statement.
“However, FSCS expects that many customers will not be eligible for compensation on this basis.”
It said it could not help the 283 bondholders who deal with LCF before the investment firm was authorised to carry out financial services business on June 7, 2016.
LCF went into administration a year ago with losses of up to 237 million pounds. (Reporting by Huw Jones, editing by Sinead Cruise)