A London-based firm, which was never permitted to provide advice on investments, has failed after a year long investigation by the Financial Services Compensation Scheme (FSCS).
Cavendish Incorporated was not authorised by the Financial Conduct Authority (FCA) and in November 2022 the regulator announced the firm was liquidated.
The FSCS has been looking into the firm, and its former appointed representative, Cottesmore Associates Ltd since August 2022.
Today (October 12) the body deemed the firm failed after the first of the seven claims received so far were upheld.
The remaining six claims are still in progress and all relate to investment advice.
Customers may have invested "substantial funds" in bonds or loan notes issued by the companies, said the FSCS. It is now considerings claims from former customers.
A post on the FSCS's website read: "In general, a business does not have to be regulated by the FCA to raise funds by issuing shares or debt securities (such as bonds or loan notes). However, any regulated activity carried out by a regulated firm in relation to bonds may give rise to a claim that FSCS can consider.
"Customers have alleged that Cavendish and/or Cottesmore gave unsuitable advice in connection with the investments.
"Neither Cavendish nor Cottesmore have ever been permitted by the FCA to provide regulated advice on investments."
It added that those who believe they may have a claim against Cavendish should submit it to the FSCS.
tara.o'connor@ft.com
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