The UK watchdog is facing fresh questions over its handling of London Capital & Finance after it emerged that it authorised the investment firm even though it was linked to a company that the watchdog had already censured, The Times reports.
Before its collapse at the end of January, £237m had been invested in LCF by some 11,500 private investors. The firm had previously raised flags with the Financial Conduct Authorityfor marketing material the regulator ruled as misleading.
The Times writes that administrators at Smith and Williamson have demanded information from a number of companies linked to the firm, including auditors at EY and PWC, which signed off LCF's accounts. Kent-based law firm Buss Murton has also been subject to requests, the paper reports.
Court action could follow under enforcement powers granted to administrators and their lawyers through the Insolvency Act if individuals do not turn over information.
An independent inquiry into the FCA's handling of LC&F was commissioned this month.