Consumer protection is at the core of regulatory objectives for the smooth functioning of the market (Cartwright, 1999; La Porta et al., 2000; Cherednychenko and Meindertsma, 2019). The recent collapse of London Capital and Finance (LC&F) in January 2019, which led some 11,625 people to lose a total of 237m that they invested with LC&F, has instigated a new interest in the old debate on the supervisory roles of regulators in investor protection. Former Court of Appeal judge, Dame Elizabeth Gloster, who penned the review, maintained that the FCA's failure to regulate properly was due to "significant gaps and weaknesses" in its practices and policies at a time when it was run by Mr Bailey who was chief executive at the FCA before becoming the Bank of England's governor (Gloster, 2020). The report highlights "flawed approach" of FCA allowed LCF to look respectable, even regarding its non-regulated products. One of the important regulatory principles of FCA is to enable consumers to take responsibility for their decisions. However, FCA also has a primary objective to ensure that the relevant market works well. For attaining this objective, FCA has bodies like FOS and FSCS to ensure there is a reasonable level of consumer protection necessary to keep consumers confidence intact.

Taking the case of LC&F, answer the following questions.

1. How could FCA as a prudent and conduct regulator achieve a balance between seemingly opposing principles of challenges facing regulators in their processes and

practices? Critically assess the role regulatory infrastructures play in achieving these objectives. Does coordination among regulators matter?

2. Discuss the punishment and adequacy of penalties (fines) to individuals and firms in achieving required deterrence and discipline.