Minibond firm censured over undisclosed commission fees
The Financial Conduct Authority has publicly censured Equity for Growth (Securities) Limited for approving misleading minibond promotions. The promotions failed to disclose high commission fees deducted from investor funds.
Hidden fees trigger public sanction and liquidation
Equity for Growth (Securities) Limited (EFG) approved minibond promotions that failed to disclose substantial commission fees charged by appointed representatives and sales introducers.
These hidden costs were directly deducted from investor capital, preventing clients from making fully informed investment decisions.
Following an enforcement petition and restrictions on the firm's regulated operations, the High Court ordered EFG to be wound up on insolvency grounds on March 25, 2026.
The Financial Conduct Authority established that a financial penalty of £386,467 would have been appropriate for the systemic compliance breaches, but opted for a public censure instead to preserve remaining assets for creditors.
Regulatory expectations on promotion oversight
Therese Chambers, executive director of enforcement at the watchdog, emphasized that firms must provide complete transparency regarding fee structures.
'Investors cannot make informed decisions without key information,' Chambers noted, highlighting that promotions must clearly detail high commissions taken from client funds.
Affected investors seeking compensation must now submit claims through the Financial Services Compensation Scheme as liquidation proceedings continue.
Too little, too late for retail investors
Public censure offers cold comfort to investors facing severe minibond losses.
Waiving the £386,467 fine rightly protects creditor funds, yet exposes flawed principal oversight.
Regulators must enforce strict gatekeeping before predatory fee structures reach retail markets.