The Financial Conduct Authority (FCA) has come under fire in an episode of BBC's Panorama for its failure to protect investors who lost a collective £46m when a property investment scheme collapsed.

The documentary showed how the FCA was alerted to the "boiler room" tactics being employed to market the Blackmore Bond but, the show said, it failed to act for two years.

In the programme, the FCA said it was not its duty to investigate the failed unregulated scheme, however, a group of MPs has called for an independent judge-led inquiry akin to the Gloster Report into the London Capital & Finance (LCF) scandal.

Blackmore, a mini-bond which should have only been sold to sophisticated investors, offered up to 10% annual interest payments. It later ceased to pay interest and in 2020 investors learned they had lost thousands of pounds.

The programme stated that the FCA was warned about the sales tactics of a marketing company pushing Blackmore in 2017 and 2018.

Paul Carlier, a finance and banking expert, made the initial report in 2017. He later directly reported the matter to then-chief executive Andrew Bailey as he knew investments were still being made.

He told the programme: "And yet another £10m-plus was invested after he was aware of it, through from the remainder of 2018 and into 2019.

"It's astonishing. I don't know what more you could have done. I entrusted them to deal with it, and they didn't."

Carlier said the FCA had "dropped the ball" over Blackmore and it had "hung investors out to dry". 

The FCA said it shared information about the reported boiler room with City of London Police after the report and forced its website to be shut down.

Bailey, now the head of the Bank of England, also came under criticism from Dame Elizabeth Gloster in the documentary.

She said of her review into LCF: "Andrew Bailey and the other directors and indeed the FCA tried to persuade me I should not attribute responsibility to individual directors - I disagreed with that.

"I think it is important that people in senior positions of power stand up and are counted when things go wrong."

Bailey declined to comment to Panorama. The regulator told the BBC it was not responsible for the investors' losses. It added it was examining the way the bond's promotional material was approved but said "investors were warned of the risks and had to confirm they understood them and could afford to lose the money".

A cross-party group of MPs called for an investigation into the collapse and compensation made similarly to those affected by LCF.

The Panorama documentary was broadcast on 16 August and is also available on iPlayer.