By Huw Jones
LONDON (Reuters) -Britain will legislate shortly to compensate investors who lost money in the collapse of investment firm London Capital & Finance, its financial services minister said on Wednesday.
The finance ministry said in April it will pay about 120 million pounds to compensate about 8,800 investors after LCF collapsed in 2019. The collapse left 11,600 investors facing losses of up to 237 million pounds.
“We will be bringing legislation forward imminently to get those payouts made,” John Glen told a parliamentary committee.
Although LCF was regulated by the Financial Conduct Authority, the mini-bonds it sold were not, leaving bondholders not eligible for compensation under the Financial Services Compensation Scheme (FSCS).
Glen’s announcement will be a relief to bondholders who had challenged the FSCS rejection of most claims in the High Court. The court dismissed the challenge in March.
Earlier on Wednesday the bondholders said they had won permission to appeal the court ruling by June 11.
“Unfortunately, it looks unlikely, as things stand, that we will be able to take forward the appeal, principally due to the FSCS’s refusal to extend an existing costs agreement to any appeal,” the bondholders said in a statement.
Without the FSCS continuing to agree not to pursue costs against the bondholders if they lost the appeal, the four bondholders would be personally exposed to paying all FSCS legal costs.
(Reporting by Huw JonesEditing by Gareth Jones and Steve Orlofsky)