“Those three letters—FCA—make me feel physically sick.”
This is the raw testimony of a retail investor, Mr N, who lost £120,000 to the failed mini-bond issuer Basset & Gold (B&G). His words lay bare a growing crisis in public trust—one not caused by market forces, but by systemic regulatory failure.
This week as reported in Money Marketing, the Financial Conduct Authority (FCA) offered B&G victims a flat £200 in compensation—not for their financial losses, but for the time it took the regulator to respond to their complaints. For many, this sum feels less like a token of apology and more like a slap in the face.
The Complaints Commissioner, who oversees how the FCA handles grievances, is now preparing to manage a flood of objections as part of a group complaint. The volume of backlash reflects not just a collective financial injury—but a deep betrayal of public confidence.
What Happened at Basset & Gold?
Basset & Gold was an unregulated issuer of mini-bonds, yet its affiliate, B&G Finance Ltd, was listed as an appointed representative on the FCA register. To the average retail investor—especially one without professional expertise—this distinction was opaque. Marketing materials created an illusion of FCA oversight. Mr N, like many others, checked the FCA Register, saw the name, and believed his investment was safe.
When the firm collapsed in 2021, it left investors with nothing but confusion and pain. It later emerged that the FCA had missed multiple red flags in its authorisation and supervision processes.
In a partial admission last month, the FCA stated it had failed to consider all information “in the round” and treated warning signs in isolation. Yet, while offering an apology, it maintained that these oversights would not have changed the firm’s fate. This justification, for many, falls flat.
Regulatory Evasion or Systemic Design?
This case reveals the dangerous ambiguity within the UK’s regulatory framework—particularly the appointed representative model, which has frequently been exploited to give unauthorised firms a veneer of legitimacy. This loophole remains one of the most egregious ways bad actors mislead the public with impunity, while the FCA retains plausible deniability.
Mr N’s case is not isolated. It is emblematic of a wider pattern: investors misled, regulators deflecting responsibility, and victims left to pick up the pieces.
Even where redress mechanisms exist—such as the Financial Ombudsman Service (FOS)—they are painfully slow. Mr N waited two and a half years for his claim to be resolved, only to be awarded £750 for distress and instructed compensation for his principal loss—far too late for someone already in mental health crisis, with no income, and whose financial stability was destroyed.
Insult on Injury: A £200 “Apology”
The FCA’s £200 goodwill payment, offered with a two-week decision deadline, feels coercive to many. “Where is the fairness in that?” asks Mr N. “They’re bullying us into a quick decision—they’re skilled at doing that.”
This type of approach erodes faith not just in the FCA, but in the entire regulatory architecture of the UK. It signals that accountability is discretionary, and that victims of financial wrongdoing are expendable once the spotlight fades.
The Path Forward: Structural Overhaul or Continued Decline?
The B&G case is yet another warning shot across the bow of the UK’s financial regulators. Unless the FCA addresses its cultural and structural blind spots—especially the murky appointed representative regime—it will continue to haemorrhage public trust.
More importantly, cases like Mr N’s show that redress cannot begin and end with compensation. It must include timely recognition, transparency, and true accountability for preventable oversight failures.
For victims, the damage is not just monetary—it is deeply emotional, often devastating, and tragically enduring.
If the FCA is to be fit for purpose, it must stop prioritising reputation management over regulatory integrity.
About the Author:
Steve Conley is the founder of the Academy of Life Planning and a passionate advocate for financial justice and regulatory reform. He works with victims of financial crime to rebuild their lives and campaigns for structural transparency in financial services.
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