Hunter Jones in the High Court: the FCA's unauthorised business escalation

The FCA has taken Osborne Baldwin Limited, trading as Hunter Jones and Hunter Jones Group, to the High Court over alleged unauthorised regulated activity in the sale of loan notes, asking the court both to halt the activity and to require money to be returned to investors (FCA). The claim is at an early stage with no trial date set, but the choice of forum matters as much as the pleadings.

Key Executive Takeaways

• The FCA is using High Court proceedings, not just public warnings, to shut down alleged unauthorised loan note activity and claw money back for investors.
• Authorised firms that touch unauthorised issuers through distribution, custody, payments or advice face heightened perimeter and Consumer Duty exposure.
• Boards should re-examine counterparty due diligence on non-standard credit products before the FCA's next enforcement wave rather than after it.

A shift from warning list to writ

For most of the last decade, the FCA's principal tool against suspected unauthorised firms has been the Warning List and consumer alerts, supplemented by occasional criminal referrals. Civil proceedings under section 380 and section 382 of FSMA, seeking injunctions and restitution, have been used sparingly. The Hunter Jones claim, filed on 21 September, indicates the regulator is now willing to commit litigation resource to perimeter cases involving retail loan notes (FCA). That is a meaningful reallocation given the cost and evidential burden of contested High Court work.

The product category is not incidental. Non-transferable, illiquid loan notes marketed to retail investors have been a recurring source of consumer harm, sitting awkwardly across the financial promotions regime, the high-risk investment rules and the unauthorised deposit-taking prohibition. By pursuing restitution rather than only injunctive relief, the FCA is signalling that consumer redress, not just market cleansing, is the objective. That framing lines up with the Consumer Duty's outcomes orientation and gives the regulator a template it can reuse.

Second-order exposure for authorised firms

The more uncomfortable question for regulated executives is what sits adjacent to firms like Hunter Jones. Loan note structures typically involve authorised introducers, payment service providers, SIPP operators, ISA managers, corporate finance advisers and, occasionally, custodians. Each of those relationships now carries elevated regulatory and reputational risk if the FCA succeeds in characterising the underlying activity as unauthorised. Restitution orders can pull in third parties who were knowingly concerned, and even where legal liability is remote, supervisory scrutiny and Consumer Duty questioning will follow.

This lands alongside a broader FCA push into consumer protection. The regulator this week also announced a cross-sector effort on protection insurance, citing that around 58% of adults have no life insurance, critical illness cover or income protection, and that 59% of that group has never considered it (FCA). The common thread is a regulator willing to intervene actively where it judges markets are failing consumers, whether through litigation or industry orchestration.

What boards should do now

Three practical steps follow. First, map exposure: any authorised firm that has processed payments for, distributed, custodied or advised on Hunter Jones products should establish the facts before receiving a section 165 request. Second, revisit onboarding and ongoing monitoring of non-standard credit issuers, particularly those relying on exemptions or offshore structures. Third, treat the High Court filing as a template. If the FCA prevails, expect a pipeline of similar claims and consider whether current governance around perimeter-adjacent business would withstand disclosure.

The Warning List era is not over, but it is no longer the ceiling of FCA ambition. Firms whose commercial models depend on proximity to the perimeter should assume the regulator now has both the appetite and the forum to test it.