An independent investigation was launched today into the Connaught Income Fund Series 1, according to the UK regulator.
The Financial Conduct Authority (FCA) review will consider the proportionality, appropriateness and effectiveness of the actions taken by the then Financial Services Authority (FSA, the FCA's predecessor) when supervising the fund series.
The fund originally provided short-term financing to businesses in the UK property market. When one of those, Tuita International, fell into administration in 2012, the Connaught fund collapsed.
Two other firms, Capita and Blue Gate, are also the subject of the investigation announced this morning.
Raj Parker, an associate member at Matrix Chambers, said: "As part of this independent review, I will be investigating the regulators' approach to and response to intelligence, as well as the FCA's involvement in the mediated negotiations before the launch of enforcement investigations in March 2015.
"I will also look at whether the regulator's jurisdiction at the time impacted its ability to protect consumers and whether its approach to communications with investors in the Fund was appropriate, timely and transparent.
"An assessment of the FSA/FCA's actions and any lessons to be learned will be made publicly available. I am keen to hear from anyone who has been affected and would encourage them to email any relevant information to me."