London Capital and Finance

Sledger

Malthusian said:

Because there is no point reinventing the wheel. As the FSCS and the Government have compensated LCF investors, any recovered assets will go to the FSCS / Government one way or the other.
The wheels of justice grind slowly and they grind exceeding small, especially in UK fraud cases. Top lawyers cost top fees no matter who hires them.
Much of the money has already been spent on flash cars or moved offshore where it cannot realistically be recovered.
Unlike the USA the UK does not take fraud seriously. I would not be at all surprised if nobody saw the inside of a jail cell over LCF, and the key players successfully mounted the "a bigger boy did it and ran away" defence. (I just ran a failed business guv which ain't no crime, the misselling of its bonds was done by third parties and nothing to do with me.)
If the investigations conclude with no criminal convictions, LCF's ringleaders would be able to sue anyone who called it a Ponzi scheme for libel, and the default position is that they would win.

Had the SFO/FCA/HMRC issued an UWO the day LCF got tumbled there would have been a greater chance of recovery and let those explain the source of the money being laundered. instead they are out to this day free as a bird covering their tracks. Timothy Schools just banged up for 14 years and Paul Seakens Linked to LCF via Prime Resorts also got jailed but it took almost a decade. Lord Razzle statement was almost an admission to what ES called a suspected PONZI scheme     https://r.search.yahoo.com/_ylt=AwrJO2Wd1gRjV0gAbwN3Bwx.;_ylu=Y29sbwMEcG9zAzEEdnRpZAMEc2VjA3Nj/RV=2/RE=1661290270/RO=10/RU=https://40plus.standard.co.uk/business/collapsed-mjs-bond-company-suspected-of-being-a-ponzi-scheme-a4273306.html#:~:text=Jim%20Armitage%20%40ArmitageJim%2029%20October%202019%20A%20key,old%20-%20the%20definition%20of%20a%20Ponzi%20scheme./RK=2/RS=gRhJFJw8XGwEzA4YwaboHIb2TtY-

jimjames

Sledger said:

Alexland said:

GDB2222 said:

Excellent news. I had not heard that, and thanks for correcting me.  Worth repeating.

It would be better for the taxpayer if the government were compensating people by recovering assets from those that took the money and were responsible for the regulatory failings...

Good question as why the HMRC,SFO,Treasury and FSCS jointly never carried out an unexplained wealth orders on LCF key players rather than S&W carrying out Civil action against 13 which will have a mega fee cost at £1200/hr eating into recovery where the FSCS is also affected.

How did your investment you'd said you were happy with at p6 here go in the end? Did you get paid out before they crashed?

Sledger

I was also with Lending Crowd Jim and selected 10 companies and factored in if one defaulted, I would break even but was lucky and averaged more than the LCF 8% as I averaged 10.4% annually and that rate too fell into your too good to be true category but was true. Ratesetter was 6% return and then panic stage when the return was frozen, and drip fed back. If LCF were a genuine company sporting the FCA badge back then along with the PWC audited accounts gave it a form of legitimacy and could have achieved 8% if it were as the LCF IM implied a legitimate company when I made the comment on Page 8. Bailin long 2017 post on SURGE which I sent to LCF to explain away and after their pathetic response I researched on google JRM who I had a meeting with in their LCF Eastbourne old printworks office where he sported a LCF Senior Accounts Manager business card and up came the red flag.  I fail to see why Bailin comments got a bit of slagging on here as without his posts the alarm bell would never have rung especially the single Loan to Andrew Thomson. Then somebody posted on Sedgewick our GST trustee being struck off in 2018 realisation came in that it may be a Ponzi scheme which it basically was as indicated in Jan 2019 Damn Lies only 6 loan companies in 2017 paid to companies set up by former LCF directors and past associates. The only truth in the LCF IM was no Defaults as when you loan to self and money launder it away the only default is when the Ponzi scheme got tumbled. How PWC who had access to the loan book never uncovered what Bailin surge post revealed raises a big Q. If LCF were a proper honest company and adhered to their business Model, I maintain there is no reason why they could not have made 8% especially when funds poured in with a 7% spread on deposits versus loans.       

masonic

Sledger said:

I was also with Lending Crowd Jim and selected 10 companies and factored in if one defaulted, I would break even but was lucky and averaged more than the LCF 8% as I averaged 10.4% annually and that rate too fell into your too good to be true category but was true.

Just because you happened to be lucky, doesn't mean the headline rate wasn't too good to be true. Not everyone lost money through an investment with LCF, but anyone in the lucky category would be rightly lambasted if they came here suggesting it wasn't too good to be true. Returns of 10%+ in P2P were not realistic when bad debt is taken into account. That doesn't mean nobody could achieve them (I achieved 12% at SavingStream, now Lendy in administration, while later investors lost their shirts), but on average you should expect less, and the rate was set with the expectation that there would be losses. It certainly wasn't true that the rate you achieved at Lending Crowd was guaranteed, and they didn't make any claim to that effect either. The reason P2P companies now have to give all of their clients an "appropriateness test" is because many believed the headline rates were what they would achieve and that things like loan security, provision funds, etc, would be effective in preventing them being exposed to losses.

There are many other instances of mini-bonds going bad, with investors suffering 100% loss of capital, where there is no evidence of any wrongdoing by the bond issuer. Take Fluid ISA Bond for example. It went into administration earlier this year with no prospect of a distribution to bondholders. By all accounts it was just a victim of the pandemic.

These are just the risks of investing in this asset class. You have to accept the risk that you may be making an investment with crooks, lending to crooks, or simply funding ventures that are doomed to failure.

Sledger

true Masonic but these firms going bust with no evidence of wrongdoing is a bit ? If a legitimate Company (unlike LCF, BM etc scammers) and are not transparent with the risks and deviate from the IM like paying a sourcing company a high commission its doomed to fail but there is no evidence of wrongdoing. But in reality, there is wrongdoing of deceit as if the IM stated 25% being paid out   nobody in the right mind would invest. Capital Bridge Liverpool based actually stated they were charging 20% in their Brochure which is beggars' belief. I pursued this as a test as it gave a Brighton number which was no other than SURGE and Aaron Phillips who sported a St James Palace fake business card let to a trail of concerns that I reported to FCA Bailey and got a 1 liner reply "This is interesting" Capital Bridge continued for a further year implying FCA did zilch. Our financial (lack of) Control system along with Companies House is a fraudsters paradise to launder money.

My Lending Crowd 10 selected companies had risks and there were numerous monthly late payments of up to 3 months which was cause for concern but were genuinely backed with security and all finally got paid in full as it was operating as a legitimate company.  LCF by contrast boasted GST trustees with 100 years of experience. But GST was a 1-man band set up 1 Pound Dormant Company so how on earth could Sedgewick fulfil his Trustee role of securing assets on the supposedly claimed SME Loans. He was doing the complete opposite of his GST Role making Loans to a limited few companys which were his and other former LCF directors and associates  companies.  All LCF loan (Self Gifted) beneficiaries claim No Wrongdoing as did Timothy Child to the very end in Court but it failed to convince the judge. Let's see what happens to Andy Pandy when he appears in Court in a few weeks' time. His lawyers already appear to think he is guilty by saying he should be spared Jail due to mental Health Issues. Where on Earth is a lawyer coming from with this, lets release all jailed fraudsters who suffer mental after their theft.

Reaper

masonic said:

Take Fluid ISA Bond for example. It went into administration earlier this year with no prospect of a distribution to bondholders. By all accounts it was just a victim of the pandemic.

I'm not sure Fluid was faultless. They seemed to be selling to unsophisticated OAPs and as for their secured loans:

Fluid’s brochure makes much of the fact that its bridging loans are secured on property.

However, investors are not investing directly in secured loans, but in loans to Fluid Lending Limited, which in turn uses the money for secured loans. These loans to Fluid Lending Limited are not secured (there is no indication that they are in the investment literature, and Companies House shows no charges against Fluid Lending Limited at time of writing).

https://www.bondreview.co.uk/2019/10/15/we-review-fluid-isas-ifisa-bonds-paying-6-per-year/

robatwork

Sledger said: St James Palace fake business card let to a trail of concerns that I reported 

I did enjoy that (freudian?) slip

masonic

Reaper said:

masonic said:

Take Fluid ISA Bond for example. It went into administration earlier this year with no prospect of a distribution to bondholders. By all accounts it was just a victim of the pandemic.

I'm not sure Fluid was faultless. They seemed to be selling to unsophisticated OAPs and as for their secured loans:

Fluid’s brochure makes much of the fact that its bridging loans are secured on property.

However, investors are not investing directly in secured loans, but in loans to Fluid Lending Limited, which in turn uses the money for secured loans. These loans to Fluid Lending Limited are not secured (there is no indication that they are in the investment literature, and Companies House shows no charges against Fluid Lending Limited at time of writing).

https://www.bondreview.co.uk/2019/10/15/we-review-fluid-isas-ifisa-bonds-paying-6-per-year/

To be clear, I'm not suggesting otherwise. All of the investments being discussed were marketed to unsophisticated consumers. All misrepresented the protections afforded by any loan security that was in place. The proportion who really understood them must have been minute. But in the case of Fluid and Lending Crowd, there doesn't appear to be fraud in the underlying lending business, yet there could still be a 100% loss of capital arising from such an investment.

It's true that Fluid's offering was structured more diffuse manner, with the legal charge registered in favour of the Security Trustee (More Group) against Fluid ISA Bond 1 Limited, with an unsecured inter-group company loan between the bondco and the lending business which held the loan security. This is a cause for concern, but as it transpires from the statement of affairs there aren't any significant creditors ranking ahead of bondholders via this structure, they'll likely be no worse off as a result of the convoluted status of their claim. Early P2P was also structured in this way, with consumers being unsecured lenders to the business, which held the secured debts of their borrowers. This changed when the FCA took over (light touch) regulation of that sector.

Contrast this with Article 36H P2P, where there is a direct lending relationship between consumer and borrower, with legal charge held directly by the security trustee, and even this can be problematic as many a P2P lender has learned. All sorts of shenanigans can ensue, including deficiencies in legal charges, non-existence or lack of registration of loan security, money intended for loan investment being misdirected from the outset, and many more pitfalls. Then we have legal wranglings over the 'waterfall' of payments following disposal of an asset, where substantial fees and penalties to the operating company can amass over a long default period and rank ahead of lender claims. Not to mention assets routinely fetching only a fraction of their alleged value. Loan security offers far less protection than a typical consumer might imagine.

masonic

Sledger said:

true Masonic but these firms going bust with no evidence of wrongdoing is a bit ? If a legitimate Company (unlike LCF, BM etc scammers) and are not transparent with the risks and deviate from the IM like paying a sourcing company a high commission its doomed to fail but there is no evidence of wrongdoing. But in reality, there is wrongdoing of deceit as if the IM stated 25% being paid out   nobody in the right mind would invest. Capital Bridge Liverpool based actually stated they were charging 20% in their Brochure which is beggars' belief. I pursued this as a test as it gave a Brighton number which was no other than SURGE and Aaron Phillips who sported a St James Palace fake business card let to a trail of concerns that I reported to FCA Bailey and got a 1 liner reply "This is interesting" Capital Bridge continued for a further year implying FCA did zilch. Our financial (lack of) Control system along with Companies House is a fraudsters paradise to launder money.

You're differentiating between legitimate companies and scammers here, but the reality is that scammers go to great lengths to pass themselves off as legitimate companies, so a lot of knowledge and research is needed to ferret them out. It isn't always possible. It's only when the firm eventually fails that it becomes plain to see there was something fishy going on. As you say, the FCA is next to useless in protecting investors in advance. In the P2P arena, which they do allegedly regulate, they allowed one firm to fraudulently alter its entry on the FCA Register and operate unlawfully for well over a year. The directors are currently facing criminal charges 3 years later. The FCA actually authorised at least two firms that subsequently failed with clear evidence of fraud coming to light when the administrators looked into their books.

This is why the test of 'does it seem too good to be true?' is so valuable. And it certainly seems to good to be true to be offered a guaranteed or low risk 8% when interest rates on savings were a tiny fraction of that.

Sledger said:

My Lending Crowd 10 selected companies had risks and there were numerous monthly late payments of up to 3 months which was cause for concern but were genuinely backed with security and all finally got paid in full as it was operating as a legitimate company.  LCF by contrast boasted GST trustees with 100 years of experience. But GST was a 1-man band set up 1 Pound Dormant Company so how on earth could Sedgewick fulfil his Trustee role of securing assets on the supposedly claimed SME Loans. He was doing the complete opposite of his GST Role making Loans to a limited few companys which were his and other former LCF directors and associates  companies.  All LCF loan (Self Gifted) beneficiaries claim No Wrongdoing as did Timothy Child to the very end in Court but it failed to convince the judge. Let's see what happens to Andy Pandy when he appears in Court in a few weeks' time. His lawyers already appear to think he is guilty by saying he should be spared Jail due to mental Health Issues. Where on Earth is a lawyer coming from with this, lets release all jailed fraudsters who suffer mental after their theft.

The fact that Lending Crowd is still around suggests it was probably one of the ok ones, but never say never. It can take several years for events to catch up with these firms, and the Collaterals, Lendys and FundingSecures all looked very plausible in the early years. But there's absolutely no question that any headline double digit return offered by any company is not without considerable risk of losing capital.

You've highlighted GST as a red flag, but it is not uncommon for security trustee companies to be set up as non-operating companies, which just sit there and hold security for the beneficial interest of investors. One should eventually see them holding charges against companies receiving loans, but this can be tricky to confirm if the borrowers aren't identified or the investment is being made in advance of any lending. The actual red flag with LCF was that they were lending to companies which were re-lending the money. There wasn't really anything else until the details of the commissions came to light (available in published accounts held back as long as possible), which was too late for many.

jimjames

Sledger said:

I would really be pleased to get any feedback to convince me to invest with LCF or avoid them like the Plague. so I can get off the barb wire on top of the fence.

Back in 2016 you asked this and were given plenty of information to avoid them like the plague as well as many red flags such as only having 1 customer in their accounts that would indicate the potential problems so going ahead was a risk you chose to take despite all that knowledge.