Page 43 - DIY Investor Magazine - May 2019
P. 43

 So, where does all this leave us? Sadly, there are several failings here; the regulator was asleep at the wheel and should have done better, but investors must bear some responsibility.
They have a duty of care to themselves; they simply cannot expect to be protected at every turn.
But regulation, or more accurately the lack of regulation has been the biggest failure; investments of this nature are not regulated, in the future they must be.
The advert, the financial promotion, and the firms making it are, currently the only part regulated.
Looking at the adverts they do look to be unfair and misleading, but that is self-regulated by the compliance departments of the firm making the promotion.
Given that they were committing a fraud it isn’t likely that compliance was too worried about the adverts, if indeed there was compliance in more than name only.
• Well, it’s very difficult to protect against fraud but not impossible
• If the bonds had been listed, or required approval by the regulator then you would have had a responsible third-party vetting them
• ALL fees must be disclosed, non-disclosure should be a criminal offence
2-years ago the implementation of the third-way was both necessary and correct; the situation with LCF simply endorses the fact.
Mr Bond doesn’t want to stop ‘small’ company’s issuing bonds, or investors from benefitting from the yields they can offer, but they must all be regulated. Continuing to allow these to fall out-of-the-scope of regulation simply invites the wrong people into the market.
Perhaps, the bond that came in from the cold, should be allowed to only live twice! Shhhhocking.
                     43 DIY Investor Magazine | May 2019

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