Treasury minister John Glen today announced a £120m government-backed compensation scheme for LCF mini-bond victims which will pay up to 80% of losses up to a maximum of £68,000.
He said the government would establish a scheme that would be available to all LCF bondholders, including those who have not already received compensation from the Financial Services Compensation Scheme.
Some 11,625 investors lost savings worth a total of £237m when LCF collapsed with the majority so far not compensated by the FSCS due to questions about whether their investments were regulated or not.
Mr Glen, economic secretary, said the government-funded scheme was being set up due to “the unique and exceptional nature of the situation concerning London Capital & Finance (LCF).”
The government scheme will provide 80% of LCF bondholders’ initial investment up to a maximum of £68,000. Where bondholders have received interest payments from LCF or distributions