Accounting watchdog investigates London Capital & Finance audits
The accounting watchdog has launched three investigations into audits of collapsed mini-bond seller London Capital & Finance (LCF).
The Financial Reporting Council (FRC) will investigate audits of the investment firm carried out by Oliver Clive & Co., PwC, and EY.
LCF went into administration in January 2019, leaving 11,600 investors facing losses of up to £237m.
A series of investigations have been launched into the company’s collapse, including a probe by the Serious Fraud Office, which is examining individuals linked to the company.
The Financial Conduct Authority (FCA), whose handling of LCF is the subject of an independent review, last week announced a permanent ban on selling mini-bonds to retail investors.
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While LCF and its marketing materials were regulated by the FCA, the mini-bonds it sold were not.
The FRC has powers to fine audit companies and ban auditors.
A spokesperson for EY said the company would be “fully cooperating with the FRC during their enquiries”, adding: “It would be inappropriate to comment further at this time”.
A PwC spokesperson said: “We will cooperate fully with the FRC. We are committed to delivering consistently high quality audits and in June 2019 introduced a major ongoing programme to enhance audit quality across the firm.”
Oliver Clive & Co. has been contacted for comment.