Complaints to the Financial Ombudsman (1581B)

TIDMLCG

RNS Number : 1581B

London Capital Group Holdings PLC

14 February 2011

London Capital Group plc

("London Capital","LCG" or the "Company")

Complaints to the Financial Ombudsman

As previously announced, LCG has been responding to a query from the Financial Ombudsman Service ("FOS") pertaining to commission rebating of a managed spot FX fund which occurred in H1 09. The query was in relation to complaints from clients that had participated in the programme.

On the basis of a previous decision given by the FOS in respect of this case, we had expected that the impact of the FOS enquiry would be immaterial on the business. However, a revised assessment from the FOS was received on 11 February.

Whilst LCG believes its actions did not cause the loss to the client in question, the FOS's adjudicator has now made an assessment that LCG should repay the total losses incurred by the client of GBP0.1m plus interest. Whilst on its own this is not material, in total the fund to which the client belonged lost GBP7.7m. It is not yet clear to what extent LCG may be found to be liable for this total loss. LCG has sufficient resources to meet a liability which extends to the full amount which the fund lost. At this stage we do not have clarity on the extent of claims, or when any payments might be required to be made.

LCG will study the findings of the adjudicator before deciding whether to refer the decision for review by the Ombudsman.

The incident was isolated; LCG does not participate in any similar funds and has not done so since closing this programme in 2009.

A further announcement will be made in due course.

For further information, please contact: www.londoncapitalgroup.com

London Capital Group Holdings plc

Simon Denham, Chief Executive Officer

020 7456 7000

Cenkos Securities plc

Nicholas Wells

020 7397 8900

Smithfield Consultants

John Kiely

020 7360 4900

Notes to Editors:

London Capital Group Holdings plc (hereafter "LCGH plc" or "LCG" or "London Capital Group" or "the Group") is a rapidly growing financial services company offering online trading services.

London Capital Group Limited (LCG Ltd), a wholly owned trading subsidiary of LCGH plc, is authorised and regulated by the Financial Services Authority. Its core activity is the provision of spread betting products on the financial markets to retail clients under the trading name Capital Spreads. Its other divisions provide online foreign exchange trading services to institutional and professional clients and also institutional derivatives broking. LCG Ltd is one of the leading providers of white label financial spread trading platforms and its white label partners include TradeFair, Paddy Power, PartyGaming Plc, Saxo Bank, and TD Waterhouse. Prospreads.com is authorised and regulated by the Financial Services Commission in Gibraltar and provides spread betting products on financial markets to professional clients.

Capital CFDs (Australia) is a trading name of London Capital Group Pty Limited, a wholly owned subsidiary of LCGH plc, and is regulated by the Australian Securities and Investments Commission.

LCG Ltd has a European passport and is a member of the London Stock Exchange. London Capital Group Limited also has access to international markets through its global clearing relationships.

LCGH plc is listed on the London Stock Exchange's AIM market. LCG is included in the General Financial sector (8770) and Speciality Finance sub sector (8775) and has a RIC code of LCG.L.

This information is provided by RNS

The company news service from the London Stock Exchange

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