London Capital and Finance

eskbanker

Uxb1 wrote: »

They (the government) just recoup the cost from increasing the annual levy the FCA impose on financial firms

There's no governmental involvement in this, as per https://www.fca.org.uk/firms/fees/how-we-calculate-annual-fees:

We are independent of Government and recover our yearly running costs through the annual fees we charge authorised firms.

Same for FSCS....

masonic

GDB2222 wrote: »

I agree that it is thoroughly unsatisfactory. If there has been fraud, that's a matter for the police. Their, the CPS's, and the SFO's, performance in other matters does not inspire much confidence unfortunately.

Unfortunately not all fraud is criminal, or indeed illegal. In this case I don't think there is anything the police, CPS or SFO can do, which is why no charges have been brought against anyone involved, despite some of them being arrested.

There was a glimmer of hope, in that the FSCS statement directly named Surge Financial as the provider of bad advice, but based on previous discussion, it cannot be held liable for the unauthorised advice it gave or the bondholder cash it creamed off, by virtue of the fact it was acting on behalf of another company.

masonic

Uxb1 wrote: »

They (the government) just recoup the cost from increasing the annual levy the FCA impose on financial firms

The cost is ultimately recouped from customers of financial firms. That's you and I, and everyone else reading.

londoninvestor

Update on the FSCS site as of 2nd August:

https://www.fscs.org.uk/failed-firms/lcf/#failed-firm-updates

FSCS wrote:

In the month since our fact-finding questionnaire went live just over 5,500 people have completed it. We are analysing the information provided and it is already helping our ongoing investigation into the nature and extent of any protected claims. We would encourage other investors to complete the form and remind them that this will in no way prejudice any future claim they may have with FSCS.

Since our last update we have also had a cooperative meeting with representatives from Surge Financial Ltd. They have agreed to provide further information that will help our investigation and we look forward to receiving that soon.

Customers are reminded that coming to us directly will mean they get 100% of the compensation that they are owed, up to our limit of £85,000, as we are a free service.

As we still do not have all the information we need to start accepting claims, and this is a complex case, it will be some time until we are ready to make any further announcements on the process itself.

Reaper

masonic wrote: »

The cost is ultimately recouped from customers of financial firms. That's you and I, and everyone else reading.

Which is a lot of money if there is indeed a new FSCS policy to pay out more often even for unregulated investments. We are only in August but already UK unregulated businesses have lost around £1 billion so far this year. And that doesn't include Blackmore.
https://bondreview.co.uk/2019/08/01/total-losses-in-2019-from-uk-collapsed-unregulated-investments-hit-almost-1-billion/

Malthusian

Reaper wrote: »

Which is a lot of money if there is indeed a new FSCS policy to pay out more often even for unregulated investments. We are only in August but already UK unregulated businesses have lost around £1 billion so far this year. And that doesn't include Blackmore.

The policy is that if enough people believe an investment is risk-free, the Government has to spend everyone else's money to make it so (IceSave, Equitable Life, defined benefit pension schemes, and now London Capital and Finance).

LCF seems to be on the way to meeting that threshold (notwithstanding the nonsensical basis on which compensation is being granted at the moment) but the other schemes on the list you posted do not at time of writing. The fact that in aggregate they number £1 billion is unlikely to matter.

LCF was unique among those companies in that they had FCA authorisation so the Government has a legal pretext to exclude all the other ones.

GDB2222

I'm slightly surprised that some of the schemes in the £1bn list are being counted as total losses. Self storage has been booming, for example, so how a company with £200m investment would have nothing to show for it is really quite a puzzle.

Malthusian

GDB2222 wrote: »

I'm slightly surprised that some of the schemes in the £1bn list are being counted as total losses. Self storage has been booming, for example, so how a company with £200m investment would have nothing to show for it is really quite a puzzle.

Cryptocurrency, discretionary investment management and early 20th century stamp arbitrage were all booming at some point but investors in the OneCoin, Madoff and Ponzi schemes still lost all or most of their money.

The performance of the wider industry that a failed unregulated investment scheme uses for its storytelling is irrelevant. Nigeria is genuinely full of corrupt officials trying to get embezzled money out of the country, does it surprise you when someone who replies to someone claiming to be one of them loses their money? It's a story. The self storage sheds are set dressing.

Self storage may be booming but it does not make sufficient money to pay returns of 8% per year, plus commissions of 40%+ to those who sourced investors into the scheme, plus the expenses of the scheme and the money taken out by the directors. That much has been clear since around 5 years ago when Store First collapsed.

If Store First still had any of that £200m left to speak of it would still be paying returns to investors (because stopping returns to existing investors causes new investment to dry up - and vice versa).

MarkCarnage

Indeed. There are some fairly obvious steps to minimise the risk of scams, but we have to stop compensating people in full for their own stupidity and greed.

robatwork

I just wanted to welcome regular readers to page 100 of this thread.