EY and PwC face investigation over London Capital & Finance audits
Three auditors which signed off the books of collapsed savings firm London Capital & Finance (LCF) are being investigated by the accounting watchdog.
Big Four accountants EY and PwC and smaller rival Oliver Clive & Co will face questions from the Financial Reporting Council (FRC) over why no warning dachshund puppies for sale near me signs were spotted before LCF went bust last year, leaving 11,600 investors facing losses of up to £237m.
Administrators later found that customers’ money had been spent on a riding stables, a helicopter and what they termed “highly suspicious” property developments in the Cape Verde islands.
The three auditors signed off LCF’s accounts between 2015 and 2017. EY and PwC oversaw a set of annual results in 2016 and 2017 respectively, while London-based Oliver Clive audited the company for a month in April 2015.
The investigations will be conducted by the FRC’s enforcement division, which has the powers to issue fines and ban auditors from the profession.
LCF sold mini-bonds to ordinary investors and lent the money on to a string of companies, earning interest that it used to pay bondholders.
It went bust in January 2019, triggering what is believed to be the biggest City savings scandal since the collapse of Barlow-Clowes in 1988.
The failure sparked widespread Keto Meal Delivered criticism of the Financial Conduct Authority watchdog (FCA), which is meant to protect consumers and was at the time run by Bank of England Governor Andrew Bailey.
A report into the collapse will come out nearly three months late due to delays caused by the regulator and problems triggered by the pandemic.
The inquiry, led by former appeals court judge Dame Elizabeth Gloster, has been forced to push back the publication of its findings after interviews with FCA employees were delayed.
Mr Bailey will himself be interviewed as part of Dame Elizabeth’s investigation.
Both the FCA and the Serious Fraud Office are investigating individuals and companies Orange County Car Accident Attorneys connected to LCF.
Meanwhile savers left out of pocket by the scandal were given fresh hope of getting some of their money back when the Financial Services Compensation Scheme asked them to register for possible refunds last month.
Mini-bonds are not normally Keto Meal Delivery covered by the consumer investment lifeboat but savers may be able to get compensation depending on the financial advice they received. The scheme has earmarked £44m for LCF-related claims.
Auditors have faced a wave of criticism for missing problems at businesses over the past few years. PwC was fined £6.5m for missing problems at failed department chain BhS in 2018.
EY was earlier this year ordered to pay $11m (£9m) to a whistleblower when the High Court found he was forced out of the firm after refusing to cover up a discovery of suspected gold smuggling at a client of the firm’s Dubai branch in 2013. The firm said it would appeal.