Leading spread betting firm the London Capital Group has today been ordered to pay up to £7.7m by the financial ombudsman, as a result of a series of administration errors effected throughout the management of client investment accounts, following an unexpected decision at the hands of the financial services regulator.
London Capital Group, one of the world’s largest spread betting and market operations, has today lost an action taken to the financial ombudsmen, resulting in the forced repayment of £100,000 to one client and the potential repayment of up to £7.6m more to a further 114 clients which may be covered by the ruling.
The ruling, concerning an investment fund promoted by the now-defunct investment outfit UK Integrity Group, held London Capital Group accountable for the losses sustained, in a decision that has come as something of a surprise to both the LCG board and industry commentators.
Simon Denham, chief executive of London Capital Group, said he was both ‘surprised and disappointed’ by the move, adding that a potential review of the decision may still be referred pending further legal advice.
While the decision will no doubt be problematic for LCG and factor heavily into its financial performance, it was added that ‘sufficient resources’ were in place to meet the liability arising from today’s decision.