The UK Financial Conduct Authority (FCA) has announced the termination of its investigation into Wellesley & Co Limited (WCL), concluding that there is no evidence of significant misconduct. The inquiry was initiated in 2022 after Wellesley Finance Ltd (WFL), an unregulated entity, underwent a Company Voluntary Arrangement (CVA) in October 2020 due to its financial difficulties.
At the onset of WFL’s CVA, approximately 12,000 investors were owed £134.7 million, out of which about £80 million has since been recovered. However, some investors faced total losses of their initial investments. The FCA’s examination centered on whether WCL had misled investors or engaged in fraudulent activities. Findings indicated that the investment risks had been accurately portrayed, and there were no indications of fraudulent behavior.
WCL was involved in promoting and facilitating high-risk investments linked to property development, which were not protected by the Financial Services Compensation Scheme (FSCS). The company was primarily responsible for approving various financial promotions related to its offerings. Within the Wellesley Group, there were additional unregulated businesses that also played roles in these financial activities.
The results of the CVA revealed varied returns to investors based on the specific products held; roughly 60% of total investments were recovered. Nevertheless, investors who held preference shares faced complete losses, totaling approximately £10 million of the outstanding debts owed to them.
As of April 30, 2025, WCL entered administration. This development prompted the FCA to investigate, as it was the only authorized entity within the Wellesley Group. The regulatory body acted upon concerns stemming from its oversight of WCL.
In assessing the situation, the FCA analyzed marketing materials, risk disclosures, and financial statements to ensure that the investment offerings had been presented transparently and honestly. They also evaluated references regarding the financial status of the broader Wellesley Group and its unregulated affiliates.
The investigation confirmed that investors had been adequately warned about the risks associated with their investments, including the potential for loss of their capital and the lack of FSCS protection. Additionally, WCL had cautioned its investors regarding the insolvency risks associated with various Wellesley companies and their underlying borrowers.
To ensure thorough scrutiny, the FCA reviewed over 30,000 banking transactions, as well as the financial records of Wellesley Group Investors Limited (WGIL) covering the period from January 2017 to April 2021. Ultimately, the investigation did not uncover any evidence suggesting that investor funds had been misappropriated or otherwise mismanaged.
This conclusion reflects the FCA’s commitment to maintaining regulatory integrity while ensuring that investors are imparted with clear information about the risks embedded in their investment choices. The findings further reinforce the importance of rigorous evaluations of financial stakeholders, particularly in high-risk investment sectors like property development.