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Ward Hadaway advises hundreds of investors on mini-bond claims

The Financial Services Compensation Scheme ("FSCS") is now considering claims from 2,000 disappointed investors following the failure of a series of mini-bonds known as Providence Bonds plc, Providence Bonds II plc and Secured Energy Bonds plc.

Investors in the companies lost millions of pounds on the failure of the mini bonds, all of which had been promoted by the FCA-approved Independent Portfolio Managers Limited (“IPM”).

The supposedly-secure mini-bonds offered eye-catching returns of up to 8.25%, but investors lost all of their capital when the respective investee companies went into administration.

With no prospect of any financial recovery from the bonds’ issuers, IPM became the subject of numerous complaints to the Financial Ombudsman Service from disappointed investors. IPM itself then entered into a liquidation process in the latter half of 2018, which potentially stymied any potential recovery for investors.

However, following this development, solicitors at Ward Hadaway have liaised with the FSCS, together with their clients, in order to allow for complaints against IPM to be submitted directly for consideration by the FSCS, which acts as the UK’s statutory investment compensation scheme.

Commercial Litigation Partner Martin Woodford, together with Associate Joe Kelley, have been acting on behalf of the Providence Bonds Investors’ Action Group (“PB-IAG”) since late 2016.

Martin said: “Much credit must go to the PB-IAG set up and run by Fiona Pitkeathly who has dedicated a huge amount of time in ensuring that we have got to this position.

The key point to note is that in the vast majority of cases IPM was not advising these investors, but was the promotor of the bonds and in my assessment was also “arranging these bonds.”

Joe added: “The jurisdiction of both FOS and the FSCS in respect of the miss-selling of mini-bonds is an interesting and developing area.”

Separately Ward Hadaway has now been approached by a number of investors in other mini-bonds which have failed, including London Capital & Finance plc.

Martin said: “We are following developments with London Capital & Finance plc closely and are talking with a number of bond-holders. There are parallels with the situation with IPM but also some important differences, to which we are giving thought.  It is very much a case of ‘watch this space’ at the moment.”

Investors who think they may be entitled to compensation in respect of the failure of IPM should visit www.fscs.org.uk/your-claim.

Alternatively, Investors can also contact Martin and Joe by email below or at Providence.Bonds@wardhadaway.com

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