The City regulator is facing new criticism from an independent commissioner over its handling of the £237m London Capital & Finance investment scandal.
The financial regulators complaints commissioner, Amerdeep Somal, has been investigating decisions the Financial Conduct Authority made in the fallout from the affair.
She circulated a confidential 151-page preliminary report with her findings to both the FCA and complainants last week.
“The FCA’s approach to compensation in the LCF cases is unjustified and does not stand up to scrutiny,” the commissioner said.
She recommended that the authority reconsider its decision on the payments, raising the prospect that more bondholders could win redress.
