ICSM BUSINESS NEWS: Andrew Bailey and the FCA are in the firing line as the BBC’s Panorama exposes its inaction over the collapsed Blackmore Bond fund losing the public their life savings
By Harry Mottram: Journalists on the BBC programme Panorama have revealed a shocking level of inaction by the Financial Conduct Authority (FCA) who failed to intervene when the Blackmore Bond fund collapsed.
The fund was controlled by CEO Phillip Nunn, who set up the investment scheme with Patrick McCreesh in 2016 to sell high-risk mini bonds to the general public. Around 2,000 invested in the fund but in 2020 alarm bells rang when Blackmore failed to pay interest to the investors. Having failed to register its accounts with Companies House in 2018 there were growing concerns about how the £25 million invested by the public was being handled.
When the fund collapsed in 2020 the public lost £46 million although concerns were raised with the watchdog FCA repeatedly in 2017 and 2018 over their sales tactics and inappropriate payments. The fund was supposed to be only invested in by experienced operators in the industry and not by the public as it was a high-risk investment offering 10% returns on money put in. Now the FCA and its then boss the current head of the Bank of England Andrew Bailey are in the firing line for their failure to prevent the scandal from unfolding.
Following a BBC Panorama documentary on the collapse of the fund MPs and the Treasury Select Committee in Parliament are demanding an enquiry into the FCS’s failings including those of its CEO Andrew Bailey. Increasingly the revelations give an impression of a Ponzi scheme as explained by Paul Carlier who worked in an office next to the Blackmore Bond HQ. He overheard the illegal sales tactics as they conned members of the public into investing their savings in the fund.
He told the BBC: “[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.”
ICSM’s advice is that if someone phones or emails you with an offer that sounds too good to be true then it probably is. Ponzi schemes offer high returns on investments but when investors want to withdraw their cash or to be paid their interest excuses are given why they can’t until eventually enough people cotton on there is something amiss. Usually journalists expose the scandal and the fund collapses – and the regulators who have failed to act are also in the dock.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk