FCA admits “human error” on Blackmore Bond supervision
The Financial Conduct Authority (FCA) has admitted that “human error” contributed to its failure to protect investors in collapsed mini-bond provider Blackmore Bond.
Blackmore Bond went into administration in April 2020, with thousands of investors being told that they will not receive any money despite being owed over £46m.
It was later revealed that the FCA had been alerted to issues at Blackmore Bond as early as 2017, but took no action to protect investors.
In correspondence with Treasury Committee chair Harriett Baldwin, the FCA’s chief executive Nikhil Rathi said: “Any suggestion that the FCA took no action in relation to Blackmore would not be correct.”
Rathi added that the FCA shared information on Blackmore Bond with City of London Police in 2017, but added that “regrettably, human error meant that the full suite of information was not sent across.”
The Treasury correspondence – sent on 14 December 2022 – followed a hearing in November last year which discussed, among other things, Blackmore.
“We are constrained from disclosing in detail the ways and means in which the FCA acted in relation to Blackmore because of statutory confidentiality requirements and because certain lines of inquiry remain open,” added Rathi.
Approximately 2,000 retail investors bought £46.8m of high-risk debt securities from the minibond firm, after being promised returns of 10 per cent per annum. Many of these investors suffered losses when it fell into administration in 2020.
Read more: Andrew Bailey under fire over Blackmore Bond collapse