The Financial Conduct Authority (FCA) has initiated High Court proceedings against Osborne Baldwin, the firm trading as Hunter Jones, marking a significant regulatory effort to address risks associated with loan note investments. Hunter Jones, a property investment company that claims to have raised over £300 million, is accused by the FCA of conducting regulated activities without proper authorisation.
Loan notes, also known as mini bonds, have come under increased scrutiny due to concerns that they have exposed billions of pounds of consumer funds to potential losses. The FCA has highlighted a pattern of collapses among firms operating within this sector, some of which have been characterised as large-scale Ponzi schemes. Thousands of investors have reportedly suffered substantial financial damage, which the regulator described as “devastating”.
Such investment schemes are typically marketed with offers of high returns and low risk, often backed by diverse assets including property, litigation funding, gold, whisky, art, cryptocurrency, and even cemetery plots. The FCA has raised concerns about the use of undisclosed, substantial commissions paid to promoters, which are sometimes deducted from investors’ funds before any capital deployment. Many of these operations are promoted from abroad to both British and international investors.
In response to growing issues in the market, the FCA advised consumers last month to avoid loan note investments, warning that many could be scams. The proceedings against Hunter Jones are still at an early stage, and no trial date has been set. Hunter Jones maintains it is operating normally and has committed to contesting the FCA’s claims. The firm asserts it only markets investments to individuals who self-certify as “sophisticated” or are high net worth investors, a method employed to circumvent restrictions on marketing mini bonds to the general retail public.
Hunter Jones is connected to a sister company, HJ Collection, which is a property investment business funded through loan notes and claims to manage a £120 million portfolio. However, HJ Collection has recently shown signs of financial distress. Both companies are owned by Reece Mennie, who is also named as a defendant in the FCA’s legal action.
Earlier this year, Equity for Growth (Securities), a regulated entity linked to this sector, was placed into liquidation after being unable to meet compensation payments ordered by the Financial Ombudsman Service. Some of those claims are related to schemes promoted by Hunter Jones.
A spokesperson for Hunter Jones said the company had not yet received detailed information about the FCA’s allegations and therefore could not provide further comment. The firm reiterated it has never knowingly promoted fraudulent schemes. The FCA continues to warn investors about the risks involved in loan note investments and remains focused on protecting consumers from potential fraud in this high-risk market segment.