London Capital and Finance

Jelli

I saved the PDFs for all my investments but don't know how to share them with people.

They call my ISA investment
"Series 1 ISA, 3-year 8% Bonds (Non-Transferable Securities)" and also
"LC&F Innovative Finance ISA".

There are more details in the PDF files named information-memorandum.pdf and investor_declaration.pdf.

I have 2 ISAs and 5 mini bonds with them opened between 2016-2018.

Alexland

Jelli wrote: »

I suppose the positive thing to take from that is a person is still employed there.

Yes although it's not clear how they are going to get paid if the FCA have frozen the company bank accounts. It's possible the FCA have provided some reassurance to key personnel that salaries will be paid. If they have been blocked from selling they have time to catch-up on old emails.

Alex

jimjames

Jelli wrote: »

I saved the PDFs for all my investments but don't know how to share them with people.

They call my ISA investment
"Series 1 ISA, 3-year 8% Bonds (Non-Transferable Securities)" and also
"LC&F Innovative Finance ISA".

There are more details in the PDF files named information-memorandum.pdf and investor_declaration.pdf.

I have 2 ISAs and 5 mini bonds with them opened between 2016-2018.

You may actually have some scope with FCA for the ISA. Reading this website it suggests that the providers have been fully FCA authorised for IF products.

https://innovativefinanceisa.org.uk/list-fca-approved-lenders-innovative-finance-isa/

Presumably that should include ensuring that the lending business exists but if not you wonder what on earth authorisation actually means. However I notice that Blackmore bonds are also authorised and based on their past history that probably doesn't mean much

justme111

Exactly what I was going to say as well - it appears that registration just means that a company has someone to do paperwork, nothing else. There was as well a p2p company about which FCA apparently had information their website that it was registered but that information was wrong !

Sledger

This question of LCF loans??.
The last annual account 19 Feb 2018 made up to 29 April 2017. {text removed by MSE Forum Team} signed off on. states

Value of secured assets 284,725,329 Wow ?????? these are commas really
carrying value of loans at 30 April 2017 47,900,134
Notional value of loans at 30 April 2017 58.798,639
sect 7 P18
9,312,978 opening

50,392,963 additional

488,500 repaid

* 418,802 Written Off ????

* Can somebody please clarify if this part of the "No loans ever Defaulted"

Interest receivable 7,822.771 which I assume to be the carrying value of loans at 30 April 2017 47,900,134 which if approx. 16% paid back on the loans which is in keeping with the business model .

Ernst Young Auditor verified this key figures along with the rest of the filing report figures and financial statement which included obtaining evidence and stated it as being compliant. so one assumes the business model to be real and performing. Or am I just being too optimistic?

The growth from 2016 was staggering and one assumes if that trend continued it would be considerably todate. The trick of delaying the accounting period raises the big ?

If I had Bail in knocking on my door several times asking for more transparency why did LCF simply not arrange for him to select a random few then conceal the company names for confidentiality. Had this been done way back it would have allayed any doubts. What has happened to the business model due to lack of current accounting to verify its still on track or derailed appears to be the main question and concern.

Have I got this totally wrong as I don't have access to Bernie" Madoff accounts to see if he pulled the wool over the auditors eyes for all those years along with Leeman Brothers,Goldman Sachs etc.

Henry Paulson CEO to Goldman Sachs became the 74th Secretary for the Treasury for his deed. His association with his chum George Bush passed a tax provision such that he was not subject to capital gains tax saving him between $36 and $50 million. Our Next BOE governor maybe MAT with a get out of Jail card and just hope I get paid back..

masonic

Jelli wrote: »

I saved the PDFs for all my investments but don't know how to share them with people.

They call my ISA investment
"Series 1 ISA, 3-year 8% Bonds (Non-Transferable Securities)" and also
"LC&F Innovative Finance ISA".

There are more details in the PDF files named information-memorandum.pdf and investor_declaration.pdf.

I have 2 ISAs and 5 mini bonds with them opened between 2016-2018.

Innovative Finance ISAs have a very wide scope to the investments they may contain. They may contain unregulated investments, including for example unsecured loans to LCF.

But others are correct that the only way LCF could offer an IF ISA is through full authorisation from the FCA. If the FCA missed the fact that LCF was selling supposedly secured loans to other businesses when it was in fact using the money to finance its own business, then that would be pretty negligent of the FCA (though not surprising given the Collateral saga).

Does any of your paperwork name specific companies to which loans were made?

masonic

Sledger wrote: »

488,500 repaid

* 418,802 Written Off ????

* Can somebody please clarify if this part of the "No loans ever Defaulted"

Interest receivable 7,822.771 which I assume to be the carrying value of loans at 30 April 2017 47,900,134 which if approx. 16% paid back on the loans which is in keeping with the business model .

Ernst Young Auditor verified this key figures along with the rest of the filing report figures and financial statement which included obtaining evidence and stated it as being compliant. so one assumes the business model to be real and performing. Or am I just being too optimistic?

It's certainly not unheard of for the borrower to roll up interest payments into the loan at the outset and when renewing, so that loans wouldn't ever default unless LCF chose to default them by refusing to roll them over.

I'm reminded of an instance of a P2P platform in which a company borrowed >100% of the acquisition price of a development site. Effectively they borrowed money to cover the first 6 months interest and loan fees and didn't put a penny towards the cost of the site they bought. The loan eventually defaulted when the borrower ran into some challenges with the development and having only spent borrowed money on it, simply walked away leaving the P2P platform to try to recover investor money.

On another P2P platform, the phrase "renewal and increase" is not uncommon and means the borrower wants to renew a loan, but can't afford the interest, so the platform is lending them money to cover the next 6 months interest.

bail-in

When innocent people are accused through implication or expressly in the media of wrongdoing, usually they quickly express their innocence and others who know they are innocent come to their rescue. Even LCF itself would not reply in response to the FT request to comment on the FT article posted in this thread yesterday about the FCA investigation. Plenty of opportunities in online media to defend. The LCF CEO does not appear to be a fan of social media except to sell. Surely, must be lots of LCF loan borrowers out in the commercial lending jungle who would come out, even anonymously. Yes, all is well. I am one of the illusive lending team. I am one of the illusive LCF corporate borrowers. Surely it would be in their interest to do so.

In earlier posts I have pointed out the obvious transparency of some mini-bonds (unlisted debt securities), such as the successful John Lewis mini-bond. In house selling and buying the mantra is location, location, location. In business it is transparency, transparency, transparency. Disclosure is a crucial aspect of investment. People giving money away to strangers usually would like to know something about their plight. How much more would they like to know if they were expecting a return on their money. Yet in the case of mini-bonds the greater the return the less the disclosure by the issuer appears to be the rule.

Being unregulated there are few legal requirements on mini-bond issuers to disclose. Caveat emptor, let the buyer beware. The astute buyer will do his homework. As an analogy, Samsung smartphones are one of the most cloned devices. So a reasonable buyer in the secondary market, seeing an unusally cheaper price, an unusually greater return on his purchase, would ask presale questions to substantiate authenticity: serial number, description, OS specifics, etc. The clone seller in response would not reply, or would give excuses, or would respond with meaningless statements: "it's genuine." Stating it is so does not mean it is so. Similar rules apply in the investment market. Stating rising figures in updates on investment websites of loan numbers and amounts of loans does not mean it is true. The diligent will ask searching questions. A fool and his money are easily parted. These high tech days, however, scams can be quite complicated.

To manage risk, to avoid scams, potential losses in the investment markets three areas of due diligence have been developed: financial due diligence, legal due diligence and commercial due diligence. In my, albeit limited, experience commercial due diligence is the most important. An investor needs to know if the business he is thinking of investing in actually exists or is likely to succeed! If an investment issuer on all levels of the business refuses to satisfy reasonable commercial due diligence requests, it would be unreasonable, even reckless to invest.

Yet unthinkingly, this is exactly how many unknowing, unassuming investors lose their money in unverified collective investment schemes. Such investors often simply do not know what to ask. Through lack of knowledge, alertness, vigilance, understanding or whatever. This can often be a problem for innocent, simple, honest people who assume others are like them. They do not like to be suspicious. They do not want to spend their time and thoughts on such matters. It makes them stressed and unhappy. But knowledge is power. Being innocent is not the same thing as being reckless. There are 101 sayings relating to these themes: a fool and his money are easily parted , look before you leap, and so on. It all boils down to wisdom, in one word. Avert the danger that has not yet come.

justme111

Joe public does not know what level of transparency to expect and demand , one can not ask if one does not know what about !! . Is it actually within FCA remit to see that the companies regulated do what they say they do ?

Aegis

FCA halts trading by mini bond firm


Not a great sign for anyone that believed the headline figures and gave money to this firm.