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London Capital and Finance
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Principles are not laws of the land. Rules are not laws of the land. That is, from the UK legal perspective, only UK laws can be enforced by the UK legal systems. The FCA Principles in the Handbook are considered as guidelines for good practice for FCA authorised businesses, but there is no legal obligation to put them into practice, nor any legal redress if authorised businesses do not honour the Handbook Principles.1
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Principles are not laws of the land. Rules are not laws of the land. That is, from the UK legal perspective, only UK laws can be enforced by the UK legal systems. The FCA Principles in the Handbook are considered as guidelines for good practice for FCA authorised businesses, but there is no legal obligation to put them into practice, nor any legal redress if authorised businesses do not honour the Handbook Principles.1
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The following article helps to understand corporate debt funding and it's rapid growth since 2010.
Corporate debt is at record levels – here’s what the risks are | MoneyWeek
https://moneyweek.com/519036/corporate-debt-is-at-record-levels-heres-what-the-risks-are0 -
The following article helps to understand corporate debt funding and it's rapid growth since 2010.
Corporate debt is at record levels – here’s what the risks are | MoneyWeek
https://moneyweek.com/519036/corporate-debt-is-at-record-levels-heres-what-the-risks-areWhen the next recession comes we'll probably see more companies go bust. And the amount of money that can be salvaged from the carcasses of said companies, will be lower than ever before.
Their standard action plan: what can you do about it?
- don't panic, look out for warning signs
- be aware of how much debt the companies you own have
- own a bit of gold
These gloriously insightful articles from Moneyweek are no doubt well worth their price (i.e. free to the end user, subsidised by advertisers and subscribers to their "share tips and advice"). If only LCF investors had read them they would be well informed about global macroeconomics and well-equipped to avoid products from charlatans such as LCF... I'm sure that's the theory.
Ironically the kind of people who think their doom-mongering Moneyweek subscription is well worth the '12 issues for £12' are probably the kind of people who think that they should look for the safety of a fixed rate ISA which has a 'guarantee' from a security trustee and some sort of FCA approval, without looking at the fine print.0 -
The administrators are suing 13 people. Nice to see Paul Careless of Surge on the list as he was heavily involved but I feared he might escape as he was using the argument his company (Surge) didn't handle any client money.
It would be better still if criminal charges were brought but hopefully that will follow.
Links:
FT article or Bond Review story5 -
That may not be the case that Surge never handled the incoming funds.. Surge were the sole team fronting up as LCF staff on e mail sign offs and sporting LCF Business cards where LCF had only 2 staff according to audited accounts.
Scottallen was a Surge employee and here is a typical e mail confirmation of funds
"Please accept this email as confirmation that "WE" are in receipt of your investment funds of ££££ Subject to compliance and verification checks your funds will be allocated to your account. If we require any further information at this stage, we will contact you. Once the checks are complete, you will receive email confirmation and your bond certificate will be issued.Kind regards,
Scott Allen
Account Manager
Freephone: 0800 410 1155
Email: s.allen@lcaf.co.ukA question put to LCF (SURGE). in 2016
Q).Why are the benefits of using these 2 bodies as a buffer rather than receive the funds direct.
A SURGE e mail response basically confirming they were not handling funds.
A). We receive hundreds of applications each week, to help with the huge amount of work the company made a decision to outsource the administration of funds to a third party. GCEN/GCS are an FCA approved custodian and offer a first class service in relation to compliance and protection of client capital.
HOWEVER, this practice was not followed on all later incoming Funds as Bondholders have revealed many were asked by LCF (SURGE) to pay into a variety of different Bank accounts and at least 2 were instructed to pay Direct to Buss Morton the LCF lawyers where Sludgewick acting as GST had previously worked. SURGES claim they did not handle the money is flawed as they were active on the receipt of funds and directed where the money was to be deposited. For money laundering purposes, we have moved on from the days where Bondholders would physically hand over boxes of Cash for SURGE to count and Handle then physically deposit it where???
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Sledger said:That may not be the case that Surge never handled the incoming funds.. Surge were the sole team fronting up as LCF staff on e mail sign offs and sporting LCF Business cards where LCF had only 2 staff according to audited accounts.
https://forums.moneysavingexpert.com/discussion/5346049/london-capital-and-finance/p7
Remember the saying: if it looks too good to be true it almost certainly is.1 -
The post-mortem continues
"The City regulator failed to "effectively supervise and regulate" London Capital and Finance (LCF) which collapsed with losses for investors.Bank of England governor Andrew Bailey, who was running the Financial Conduct Authority (FCA), has apologised to those who lost life savings."
https://www.bbc.co.uk/news/business-55335378
Full report here
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A prime example of someone 'failing upwards'.
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The report released yesterday made some quite shocking reading about the failure of FCA to do anything regarding LCF despite repeated warnings and repeated failures by LCF to comply with the limited rules they were told to abide by. It seems FCA were given some quite detailed information about LCF yet it never got passed on and different teams weren't sharing information that could have given a clearer picture of what was happening. Nice to see that my warnings to FCA were listed in the report though and I suspect there may have been others from here listed too.
To have a regulated company that reports every year that they have done zero regulated business but taken in tens of millions of pounds should have set some alarm bells ringing.
This is a summary of some of the key points from the 400 page report
https://damn-lies-and-statistics.blogspot.com/2020/12/gloster-review-of-lcffca-failure.html
Remember the saying: if it looks too good to be true it almost certainly is.6
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