Andrew Bailey under fire over Blackmore Bond collapse
The governor of the Bank of England has come under fire for his handling of the Blackmore Bond collapse while he was the chief executive of the Financial Conduct Authority (FCA).
Andrew Bailey (pictured) was the FCA chief from 2016 until 2020. Blackmore Bond went into administration in April 2020 amid allegations of inappropriate payments and unethical marketing tactics.
When the company collapsed, £46.8m was owed to investors, and the administrators warned that thousands would not be refunded.
However, a BBC Panorama investigation has uncovered evidence that the FCA was aware of issues at the mini-bond company as early as 2017.
A bipartisan group of MPs have now called for an inquiry into the FCA’s handling of the Blackmore Bond.
Panorama: The Billion-Pound Savings Scandal was broadcast last night (15 August) and featured a number of Blackmore victims and finance experts.
Paul Carlier, a finance and banking expert, told Panorama that he first reported his concerns about the marketing of the Blackmore Bond to the FCA in 2017. He said his office was next door to the company selling the bond, and he overheard them using high-pressure “boiler room” sales tactics, which are banned.
“[The sales people] were literally cold-calling people and approaching people with an intent to sell them a toxic or worthless investment product, including the Blackmore Bond,” he told BBC Panorama.
Carlier contacted the FCA again in 2018 when he learned that the company was still in operation, escalating his complaint directly to Bailey.
Read more: 5 takeaways from Blackmore Bond administrators’ progress report
Carlier added that when he complained to the FCA about its lack of action, the regulator sent a response which stated: “However, I consider there was a missed opportunity to reconsider and act on the intelligence you provided.” This line had been crossed out.
“Somebody has sought to conceal that,” he told the BBC. “That is the definition of a cover-up.”
The FCA has denied that it attempted to cover up its actions and said the letter to Carlier was changed because “further evidence came to light”.
Following the Panorama investigation, there have been fresh calls for regulatory reform, and new criticisms of Bailey’s conduct.
MP Kevin Hollinrake, who sits on the Treasury Sub-Committee on Financial Services Regulations, said: “I’d like to say this is a one-off case, but the reality is we see the succession of cases like this where the FCA has failed and it has failed here again.”
Liberal Democrat peer Baroness Susan Kramer agreed that an inquiry was needed “to deliver some justice for the people who, essentially, were scammed in an entirely public and, what should have been, regulated setting”.
To date, the FCA has not taken any action against the Blackmore directors, Phillip Nunn and Patrick McCreesh. McCreesh has denied any wrongdoing.
Read more: Transparency Taskforce invites P2P investors to march against FCA failures