Treasury Committee chair Nicky Morgan has written to the Financial Conduct Authority (FCA) board calling for an investigation into whether there were regulatory failings surrounding the collapse of London Capital and Finance (LC&F).

In her letter, Morgan requested that the regulator consider whether the tests around the need for a statutory investigation into possible regulatory failings have been met.

LC&F went into administration in January 2019, following concerns raised by the FCA in December 2018. The authority directed LC&F to withdraw its promotional material for its mini bonds on the basis that the marketing was “misleading, not fair and unclear”.

Furthermore, Morgan has written to Treasury economic secretary John Glen requesting that the body use its power to force the regulator to conduct the investigation, in the event that it declines the request from her.

Morgan said: “The FCA is currently investigating LC&F’s marketing material and the SFO is investigating individuals associated with the company. Yet there is a broader need to understand what can be learned in a regulatory sense from the events at LC&F.

“If the FCA decline, I have asked HM Treasury to consider using its power to require the regulator to conduct such an investigation.

“Even if the regulator does not conduct an investigation, the FCA Board should set out whether firms are using their FCA-authorisation in a way that may be misleading to consumers, whether consumers need greater clarity on what such an authorisation does to protect them, and whether mini bonds should now be regulated.

“The stories of those affected by the actions of LC&F are distressing. The Government and the regulator must do all they can to prevent history from repeating itself.”

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