The financial watchdog has issued a warning to the crowdfunding sector that it will get tough with bosses of platforms that fail to protect the interests of investors.

The Financial Conduct Authority, which put firms on notice in February last year, has written to crowdfunding chief executives calling on them to ensure that consumers “can understand the risks these speculative and high-risk investments pose”.

One area of concern highlighted in the letter from Debbie Gupta, the FCA’s director of consumer investments supervision, is that of the standard and transparency of due diligence conducted on the companies that consumers are being offered the chance to invest in. There have been complaints at the lack of clarity provided by crowdfunding platforms on how much — if any

Read more…