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London Capital and Finance
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One explanation is that the loans were made with interest retained. That's a common practice in the P2P lending industry. In some cases the interest is borrowed as part of the loan, held by the lending company and drip-fed to investors over the loan term.
That would make sense. However if a company balance sheet is totally identical for 3 consecutive years how can it possibly be trading?Remember the saying: if it looks too good to be true it almost certainly is.0 -
Just a few words can alleviate anxiousness, increase peace of mind and bring some relief. The knowingness that something is happening. Just think how that, a few words, would help to ease the suffering of thousands; and better to focus on positive rather than negative news
There should be an encouraging update as to the FCA investigation of LCF on the FCA website every day, however little, as to the progress of the investigation. This should apply to all FCA investigations. The more investors request this the more likely it will happen.
Having seen some of the comments from LCF investors on a forum there seem to be many that are in complete denial and only want to hear happy news. Despite realising that they've been conned by London Capital & Finance to buying an unsuitable product they seem to believe every word the company has said and still don't realise the risk of losing their money even if this investigation is successful. Why should the FCA just give positive words that may give false reassurance? It seems entirely unrealistic to expect daily updates on a process that may take months and could lead to criminal charges.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Because the website had on it "FCA regulated" and an attractive interest rate. I thought while not secure was a legit UK financial institution with risks that were true to their meaning (genuine loans not being repaid, rather than made-up loans not being repaid).
This is where FCA are partly culpable I beleive, in that they took far too long to stop these particular highly misleading adverts and they still are taking no more action on similar companies. Just look at the results you get if you google "high rate ISA". Even if they try to avoid responsibility by saying its not their job to police adverts, they should pass it over to those whose job it is (who also are failing in their responsibilities)
However this doesn't mean you can just evade responsibility, you also are equally culpable,you said "the rest of those questions weren't applicable to me" but that's the point , if you didn't qualify under those criteria you should have stopped at that point rather than, apparently, thinking "oh i'm not a millionaire so this doesn't apply to me" rather than "I'm not a millionaire so i better not invest"0 -
Just a few words can alleviate anxiousness, increase peace of mind and bring some relief. The knowingness that something is happening. Just think how that, a few words, would help to ease the suffering of thousands; and better to focus on positive rather than negative news
Ridiculous. It may give false hope, plans to be made that turn out to be based on falsehoods. It may cause People to delay taking action now which might help for the future to start recovering from the loss rather than to wait years and miss opportunity to make whatever financial adjustments need to be made. . And then the FCA will be rightfully criticised if t turned out that most of all the moneys gone. It may even cause ipeople to invest in other similar companies on the grounds that this one is actually looking OK when it fact it is anything but.
Words are powerful in effect. A few words, whether lies or truths, can be the seeds that bring down or save a person, a family, a corporation, an army, a whole country. Propagandists know this and use it to destroy or strengthen countries, as the Nazi Goebels was infamous for in the Second World War.
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Now you've lost the plot Words can't magic up money if it's gone.
Anyway, aside from veering close to Godwin's law, the point is that these investigations usually take months at best to years in most cases and daily write ups would be pointless and detract from the work they are doing. There's no point saying something until there's something to say.0 -
I agree that if FCA required this type of company to ask more detailed questions about the applicant's assets, then reject applications from people who didn't meet the criteria, it would give the unsophisticated more protection.
They do. COBS 4.12.9 onwards.
This does not specifically apply to investors who were not HNW or sophistiacted and ticked the box saying they were not investing more than 10% of their free assets, but the general duty of regard to the client's best interests still applies.masonic wrote:One explanation is that the loans were made with interest retained. That's a common practice in the P2P lending industry. In some cases the interest is borrowed as part of the loan, held by the lending company and drip-fed to investors over the loan term.
It may well be common practice in the P2P lending industry but it is also the action of a Ponzi scheme. Investors are being paid back with their own money. It does not in itself make the investment a Ponzi scheme. However, if it is not fraudulent, then it is a complete waste of time and investors' money; they could have invested the portion of the loan which is parked in a corporate cash account and drip-fed back to them in something more productive.
If a project borrows money on the basis of regular interest it should be generated from external yield generated from that project. If no yield is expected for the first few years then the loan should be structured accordingly, with interest rolled up and paid at the end of the term. Corporate finance 101.0 -
There should be an encouraging update as to the FCA investigation of LCF on the FCA website every day, however little, as to the progress of the investigation.
Not to labour the point AnotherJoe made, but what action do you think the FCA should take if there is no encouraging news?
Keep shtum, which is what the FCA are doing? Or lie?
There are no other options so pick one.0 -
Having seen some of the comments from LCF investors on a forum there seem to be many that are in complete denial and only want to hear happy news. Despite realising that they've been conned by London Capital & Finance to buying an unsuitable product they seem to believe every word the company has said and still don't realise the risk of losing their money even if this investigation is successful....
Who is really in denial here? The bondholders, LCF, the FCA or all of them? I am sure many here have corresponded with the FCA presenting similar facts and views as to the high risk picture of LC&F, the violation of FCA Handbook Principles, the lack of cooperation re due diligence, and so on, right from the beginning of the mini-bond offering. The FCA could have acted much earlier with disclosure requests when it would have been easier and far less consequential. I am sure many could show similar sympathetic and understanding replies from the FCA over the last three years, including the pre LCF FCA authorised period, stating there was nothing the FCA could do. The FCA has parliamentary powers with respect to authorised and unauthorised firms and products. Hindsight is not a good teacher because it is often too late to be useful in that particular problem. There are many supportive sayings along this theme: a stitch in time saves nine, he who hesitates is lost. The same thing will happen again with current minibonds. Parliamentary committees have recommended a change in the corporate trust laws so that security trusts correspond with charity trusts which are often more transparent as the charity trustee can see what the trust monies are used for, unlike a corporate trust trustee. Currently, the very purpose of a legally required corporate trust, to protect the capital investment for the beneficiaries, is thwarted by the lack of a right for the trustee, and the beneficiaries, to access capital usage and see what the capital is being used for. Monthly reports by the trustee are not independent. They are just statements by the bond issuer, the truth of which cannot be verified by the security trustee, who it appears may also be part of the problem.0 -
Malthusian wrote: »Not to labour the point AnotherJoe made, but what action do you think the FCA should take if there is no encouraging news?
Keep shtum, which is what the FCA are doing? Or lie?
There are no other options so pick one.
How about: chin up, always look on the bright side of life, things can't get any worse, buy a baseball bat?0 -
How about: chin up, always look on the bright side of life, things can't get any worse, buy a baseball bat?
Worse things happen at sea? Starving children in Africa would love to have £10,000 in life savings to lose in LCF? Life's a ladydog and then you die?
If investors want meaningless cliches they should consult their vicar, not the FCA.0
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