At Prime Minister's Questions last week I called on Prime Minister Boris Johnson to take action to prevent innocent people from losing their pensions or life savings in high risk investment schemes.
I highlighted one recent case in which investors lost £46 million when property development company Blackmore Bond plc went bust. The company had continued trading and marketing their investments for over two years after city regulator the Financial Conduct Authority had been warned that something was wrong.
I told the Prime Minister, "It took just over three years for £46 million of other people’s money to disappear. Around 2,800 small investors, whose money the directors promised would be secure, now face losing everything. Most of the money—around £26 million—was taken by Blackmore Bond after the Financial Conduct Authority had received compelling evidence from an expert witness who told them that he thought the company was breaking the law, but before the FCA took any decisive action.
"How many more scandals like that will it take before we have a regulatory environment that is fit for purpose and that offers our constituents proper protection against investment scams?"
In response the Prime Minister said he was not aware of the case but promised to look into it.
I wouldn't necessarily expect the Prime Minister to be fully aware of this one example but we've seen a whole succession of companies taking tens of millions from small investors who then lose everything when the company goes bust. It's astonishing that the Prime Minister doesn't even seem to know that there's a problem.
We've seen a succession of companies taking people's money, giving guarantees that turn out to be worthless, often deliberately targeting small investors with totally unsuitable types of investment.
In the case of Blackmore Bond the Financial Conduct Authority were warned in 2017 that something wasn't right. The documents the company was lodging and in some cases failing to lodge at Companies House show clear signs of serious problems but none of the regulators picked these up. The company's auditors highlighted some stark warnings in the 2017 accounts but they were apparently under no obligation to do anything else.
I have a constituent who trusted his life savings to Blackmore Bond and has probably lost everything. I've other constituents who have seen their savings or pensions disappear in other investment scandals. They and thousands of others are entitled to feel that all these regulators let them down, either because the law doesn't give them the powers and the responsibilities they need, or because they had the powers and failed to use them.
I will be following up with a letter to the PM urging him to take this matter seriously.