The FCA has ruled out compensation or launching a criminal investigation into the £46m collapse of Blackmore Bonds despite complaints from investors.

Despite the refusal to make substantial compensation payments, the regulator has said it pay between £150 and £250 to each complainant because of how long it has taken to respond to the complaints.

About 2,000 investors lost about £46m when Blackmore Bond collapsed amid allegations of suspect sales tactics and inappropriate payments.

If all 2,000 receive the maximum £250 compensation the FCA will potentially pay out up to £500,000.

Investors asked the FCA to pay compensation and launch a criminal investigation into the circumstances surrounding mini-bond provider Blackmore.

They claimed that the regulator had failed to act following warnings about the firm, failed to protect investors and allowed misleading marketing.

Blackmore Bond PLC was an unregulated firm that raised funds by issuing mini-bonds. Two regulated firms, NCM Fund Services (NCM) and Northern Provident Investments (NPI), approved the financial promotions for the mini-bonds but the FCA has declined to take action against the firms.

In a letter to those who had complained to the FCA about the way it handled the Blackmore Bonds case, the regulator said that it, “conducted thorough enforcement investigations” into NCM and NPI and decided that the financial promotions were largely accurate and contained very relevant risk warnings to consumers, so it did not take enforcement action against either firm.

The regulator said: “The FCA has carefully considered the complaints and decided not to uphold them. The FCA never had any supervisory oversight of Blackmore, handled intelligence received about the firm appropriately and found previously that the financial promotions were largely accurate and contained relevant risk warnings.”

The FCA has faced a raft of criticism over its handling of the Blackmore Bond collapse, including a BBC Panorama TV investigation broadcast in August which accused the regulator of a cover-up.

There were claims that the mini-bonds were marketed to average retail investors when, under current regulations, they should only have been sold to sophisticated investors.