UK accountancy regulator opens investigations into MFS auditors

The UK’s accountancy regulator has opened four investigations into auditors and accountants linked to collapsed mortgage lender Market Financial Solutions, extending scrutiny beyond the lender itself and into the firms that worked around it.

The Financial Reporting Council is investigating three firms and three individual accountants, according to reporting on Thursday. The probes add a new regulatory front to the fallout from MFS’s collapse earlier this year and come alongside a separate enforcement investigation by the Financial Conduct Authority.

What the regulator is looking at

The new FRC cases focus on work connected to MFS and related entities. Reporting by the Financial Times and The Times said the watchdog has opened four investigations in total, although not every subject has been publicly identified.

The regulator has not set out the findings of any of the cases. At this stage, the investigations indicate scrutiny of the audit and accounting work surrounding MFS rather than any conclusion of wrongdoing.

The firms named in reporting

The firms identified in the coverage include Berkeley Finch, Silver Levene and Magus Chartered Accountants. The reporting also refers to unnamed accountants who are part of the FRC’s probes.

Berkeley Finch signed off MFS’s 2024 accounts with an unqualified opinion, according to the Financial Times. Silver Levene audited Paresh Raja’s Zircon Group in 2024. Silver Levene said an investigation did not mean findings had been made and said it would cooperate fully.

The Times said the regulator had opened four investigations into accountants and auditors linked to MFS, underscoring how the scrutiny is now spreading across the group’s professional advisers.

How the collapse escalated

MFS collapsed in February 2026 and entered administration after allegations of fraud and financial mismanagement surfaced around the lender’s business. The case has drawn attention because MFS had lent about £2.6 billion before it failed.

The collapse has also been linked in reporting to alleged double-pledging of collateral and a reported shortfall of about £1.3 billion. Those allegations remain part of the broader backdrop, but they have not been resolved by the current FRC investigations.

The company’s downfall has therefore moved from an operational and creditor fight into a wider regulatory matter, with accountants and auditors now under direct examination.

Why the audit structure matters

One reason the case is drawing scrutiny is the way oversight was split. The reporting says multiple small firms handled parts of the group rather than one consolidated audit by a major firm.

That structure raises questions about how responsibility was divided across related entities, how much visibility each firm had, and whether any gaps emerged in the overall assurance process. The reporting does not say the FRC has reached conclusions on those questions.

The investigators may also be looking at whether the relevant firms properly assessed the risks around the group’s accounts, financing structure and related-party relationships. Those issues are central to the public questions raised by the collapse, but the current reporting does not disclose the scope of each individual probe.

Wider regulatory pressure

The FRC action sits alongside the FCA’s separate investigation into MFS, which was opened after the lender’s collapse. The two regulators are pursuing different aspects of the story: one aimed at the accounting and audit side, the other at the lender itself.

That parallel scrutiny increases pressure on everyone connected to the failure, including the lenders, auditors, accountants and administrators dealing with the aftermath. It also means the public record around the collapse is still developing.

Administrators and creditors may also continue to shape the picture through court filings and claims as the case progresses. The research notes that further filings could deepen the allegations around the lender’s conduct and collateral practices.

What happens next

What remains unclear is the exact scope of each of the four FRC cases, whether all subjects have been named, and whether any firm or individual will ultimately face sanctions.

The next material developments are likely to come from the FRC itself, from responses by Berkeley Finch, Silver Levene or Magus Chartered Accountants, and from any further clarification from the FCA. For now, the headline development is that scrutiny of MFS has widened beyond the collapsed lender to the advisers who worked around it.