City watchdog begins legal action against loan notes firm Hunter Jones
The City watchdog has begun High Court proceedings against a loan notes firm and its chief executive, according to court filings, amid growing scrutiny of the high-risk instruments and their availability to retail investors.
The Financial Conduct Authority (FCA) has initiated proceedings against Osborne Baldwin, which trades as both Hunter Jones and Hunter Jones Group, and its founder Reece Mennie, alleging the company sold loan notes and carries out regulated activity without authorisation.
The regulator is asking the court to block Hunter Jones from carrying out regulated activity and require it to return money to investors, the FCA said in a statement.
Proceedings are at an early stage and the court is yet to determine the claim, the FCA said. No trial date has been set.
Mennie told City AM he and Osborne Baldwin had been in negotiations with the regulator and had not received any warning of court action. Osborne Baldwin did not immediately respond to a request for comment.
The FCA declined to provide comment regarding Mennie being unaware of proceedings.
A person familiar with the proceedings said the watchdog published details of the claim it deemed appropriate to further its consumer protection objective.
Mennie, who founded the firm in 2013, calls himself a “self-made entrepreneur, investor and business leader”. He also founded and runs HJ Collection, a property investment scheme, operating across the UK and Dubai.
Loan note scandal
The proceedings come amid growing scrutiny of loan notes and their availability to retail investors. The instruments often pledge huge returns with minimal risk but several schemes funded by the notes have collapsed in recent months.
Earlier this year, the FCA censured a business which worked with promoters who mis-sold “loan notes” by the City regulator. Equity for Growth (Securities) approved financial promotions for third-party firms which the regulator said were “unfair, unclear and misleading”.
It was placed into liquidation in March as it could not afford to pay the level of compensation ordered by the Financial Ombudsman Service.
Its appointed representatives included Hunter Jones, which promoted schemes including Dolphin, a German property scheme which collapsed in 2020, leading thousands of British and Irish investors to lose money.