FCA Investigates Collapsed Lender Market Financial Solutions Amid £1.3bn Concerns
The Financial Conduct Authority (FCA) has launched an enforcement investigation into Market Financial Solutions (MFS), the Mayfair-based mortgage and buy-to-let lender that entered administration on February 25, 2026, following an “unexpected banking-related issue.” The investigation comes after a worldwide freezing order was secured against MFS founder Paresh Raja, barring him from dissipating assets potentially worth up to £1.3 billion.
Allegations of Fraud and Double Pledging
Creditors allege that some borrowers connected to Raja may have been part of a scheme to extract funds under false pretenses. Concerns have too been raised about “double pledging,” where security for loans was allegedly granted to multiple financial institutions for the same property.
FCA Oversight and Regulatory Scope
MFS is classified as an “Annex 1” business, meaning it was solely registered with and supervised by the FCA for compliance with Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. This registration did not subject the firm to the wider FCA regulatory rule book.
Financial Exposure and Asset Freezing
The collapse of MFS has raised concerns about risk controls in private credit markets and the exposure of various financial institutions. Banks including Barclays, Jefferies, and Santander, as well as hedge funds and private credit lenders like Elliott Management, Castlelake, and Apollo’s Atlas SP unit, appear to be affected. Barclays CEO CS Venkatakrishnan stated that the bank’s anticipated losses would be “materially lower” than £500 million, the amount MFS owes them.
Background on Market Financial Solutions
Founded in 2006, MFS managed over £1.2 billion in cumulative lending throughout its lifetime, peaking at a £2.4 billion loan book. Prior to entering administration, Paresh Raja maintained that the situation did not reflect a failure of the underlying business, but a “technical and procedural impasse.” It has also emerged that MFS and Raja had links to a former Bangladeshi Government minister subject to international money laundering investigations.
Ongoing Investigation
The FCA investigation is ongoing, and the scope of the inquiries has not been fully disclosed.