In 2021 the Insolvency Service confirmed that the Magna Group had been wound up by The High Court, following a long-running min-bond mis-selling scandal. TLW Solicitors has been helping some of those who’ve been affected.
City watchdog, the Financial Conduct Authority (FCA) banned the mass marketing of mini-bonds to retail customers (in other words, ordinary people, not specialist investors) on 1st January 2020, after a series of failed bond schemes left investors out of pocket.
The FCA is an independently run and funded body that regulates the financial services industry in the UK and whose objective is to make sure that the financial markets function well. They work to ensure that financial firms and individuals operate honestly, fairly and effectively, and expect their members to follow their standards and rules. The FCA has powers to withdraw a firm’s regulation, to stop firms and individuals from undertaking regulated work, and to issue fines and bring criminal prosecutions against those that breach the rules.
While a business raising money by issuing mini-bonds does not have to be regulated by the FCA, any investment advice offered by firms about mini-bonds, or distribution of mini-bonds, is regulated activity. Companies were not explaining adequately the risks of mini-bond investments to their clients. As the bonds are often issued by start-up companies or businesses that struggle to borrow money from banks, they may be more likely to have cash flow problems, or fail altogether, resulting in them being unable to pay any money back to investors.
Sarah Spruce, head of Professional Negligence at TLW Solicitors, says:
“We are working with a number of clients who invested in mini-bonds through Magna Group – they’ve lost a lot of money and faced a worrying and uncertain financial future.
We always remind people that, if an investment sounds too good to be true, it probably is. Annual returns of over 10% are often unrealistic. Thankfully, the ban on promoting mini-bonds to retail investors will protect more people from financial mis-selling, but if you have been given unsuitable advice in relation to mini-bonds, please get in touch. We can discuss your options and see if we can help you make a claim.”
If you, a friend,colleague or loved one invested in mini-bonds with through Magna Group and lost money, it may be that the investments were unsuitable for you or you were not advised of the risks involved. Anyone wishing to bring a claim should do so without delay.
Telephone us on 0800 169 5925, email firstname.lastname@example.org or complete one of the forms below.
It is important to get advice as soon as possible as strict time limits can apply.
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