London Capital and Finance

bail-in

What Powers Does The FCA Have During An Investigation?

During an investigation, the FCA has the authority to:

Suspend you and/or the firm from undertaking regulated activities.
Fine the firm, or those who breach FCA rules or commit market abuse.
Apply to the Court for injunctions, winding up orders and restitution orders.
Bring criminal prosecutions against you to tackle financial crime, such as insider dealing, market manipulation, fraud or unauthorised business (breaching the general prohibition).
Impose fines and public censure.
Seek compensation for your consumers.
Request information from the firm (both online and hard copy) and ask you questions under interview.

Sledger

re posting 588
Odd thing here is I have just searched Companies House yet again and entered GST and it still comes up as listed as wellington Gare UK and there is no filing of an address change. I cant find the posting in this feed a few days back about the Maltese link but luckily I copied it as
https://beta.companieshouse.gov.uk/company/09846126/persons-with-significant-control where sure enough its a Maltese address

How many other Companies linked to LCF are in a similar situation with overseas addresses but Companies House check has them in the UK . Has anybody checked or do we have to type in Person with significant control and search each company one by one rather than just put in the name or number in Companies House.

bail-in

Our investigations – the evolving approach
Speeches Published: 15/06/2017 Last updated: 15/06/2017

Speech by Jamie Symington, Director of Investigations at the FCA, at the Legal Week Banking Litigation and Regulation Forum.

https://www.fca.org.uk/news/speeches/investigations-evolving-approach

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Speech by Jamie Symington, Director of Investigations at the FCA, at the Legal Week Banking Litigation and Regulation Forum.

Speaker: Jamie Symington, Director of Investigations
Event: Legal Week Banking Litigation and Regulation Forum, London
Delivered: 15 June 2017
Note: This is the speech as drafted and may differ from delivered version.

Highlights
Our approach to investigations is evolving in step with our Mission and general response to the challenges of the future.
We do not use investigations only as a precursor to contemplated enforcement action when something has gone wrong. But rather, investigation is a tool for finding out what has happened.
Our response to an event which has been investigated will be decided only when we have sufficient information to do so.
We are developing a greater range of responses following investigation.
We see culture change as the key aim of our work on individual accountability which is why the Senior Managers Regime for deposit takers and the forthcoming Senior Managers & Certification Regime for all other firms are key work streams in our Business Plan.
Let me ask you to imagine this situation.

It’s an ordinary day in the office. You go out for lunch. You come back to your desk and find that a bottle of water you left on your desk has tipped over and spilt all over the desk. Your correspondence, your computer, your pictures of the family all soaked.

Naturally you want to know what happened. So you ask questions. “What happened?” Now, the answers you might get from colleagues could vary enormously:

“I don’t know, I wasn’t here, I didn’t see”

or

“I saw someone tip the bottle over, but I don’t want to say who it was.”

or

“Oh that was Nadia. It was an accident. She’s really sorry. I’ve called IT about the computer and facilities to clear up the mess.”

So what drives the differences in responses that you might get?

It could be the way you ask the questions. But more typically, it is driven by your relationship with the people of whom you ask the questions. And critically, it is likely to depend on what their expectation is of the purpose for which you are seeking the information. What will be the consequences for them and for others of giving you the information you are asking for. Conversely, what are the consequences of not giving you the information?

For investigators, especially regulator-investigators, this is a really important dynamic to understand. We must set the expectations clearly between ourselves and the persons from whom we are seeking information. What we are doing? And why we are doing it?

What I would like to talk to you about this morning is how the FCA uses its powers of investigation, and how this is evolving to fit with the FCA’s recently published Mission.

I want to be clear that the FCA does not use investigations only as a precursor to contemplated enforcement action when something has gone wrong. But rather, investigation is a tool for finding out what has happened.
I want to explain how this approach fits with the FCA’s mission and general response to the challenges of the future.
And I want to explain how we are developing a greater range of responses following investigation.
What are we trying to improve and why?
Let me start be explaining what it is we are trying to improve with our evolving approach to investigations. In essence it is about being simple and clear about what we are here to do as investigators.

If we stand back and look at how investigations by the FCA and its predecessor the FSA developed over time, there are some aspects that deserve some examination. Some of this relates to how the regulator goes about investigating. Some is about how the firms and their professional representatives respond to investigations.

The perception is sometimes this: Investigation is what the FCA does when a matter is “in Enforcement”. People assume that if a matter is “referred to Enforcement” then the FCA wants to take enforcement action. People fear that the investigation process then becomes simply the gathering of evidence to support FCA action.

I don’t think the FCA or FSA intended it to look like that, but I can understand why that perception has come about. The response of the regulated sector is therefore sometimes that every effort must be made to keep matters “out of Enforcement”.

And where a matter is under investigation, then the relationship can become adversarial and quasi-litigious early on in the process. Disputes can arise unnecessarily over what material can and cannot be provided to the investigators. Delays and distractions can ensue.

The problem with this dynamic is that it helps neither us nor firms to do our jobs properly.

The point of an investigation is to find out what has happened. This job needs to be done by investigators who will act fairly and impartially without fear or favour in getting to the truth. When something has gone wrong, this should be as much a priority for the firm as it is for the regulator.

We will then use the findings of the investigation to inform decisions as to what action needs to be taken to protect consumers and to restore confidence in markets.

That is our job as investigators. It is clear and simple.

digannio

{text removed by MSE Forum Team}
https://www.standard.co.uk/business/business-focus-too-good-to-be-true-how-highrisk-bonds-are-marketed-to-an-unsuspecting-public-a4035436.html

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FCA ENFORCEMENT: REFERRAL CRITERIA

https://www.fca.org.uk/about/enforcement/referral-criteria

jimjames

Sledger wrote: »

How many other Companies linked to LCF are in a similar situation with overseas addresses but Companies House check has them in the UK . Has anybody checked or do we have to type in Person with significant control and search each company one by one rather than just put in the name or number in Companies House.

Companies House is correct as the registered address is still UK. This address is the ownership of the company being transferred to a company in Malta. So it's the registered address of that company not GST as per the link I posted earlier

https://damn-lies-and-statistics.blogspot.com/2019/01/london-capital-finance-fca-update.html

Some investors seem to be placing their hope on the claims by LCF that the loans were asset backed. Unfortunately at least 2 of the companies look to have limited assets, one made a £10 million loss and the other had an asset revaluation of £23 million just before LCF lent money to them and has not traded in the last 3 years. The revaluation is now noted as "impaired and will be quantified in due course". I'd be preparing for that to be written back to original value.
https://damn-lies-and-statistics.blogspot.com/2019/01/london-capital-finance-have-loans.html

bail-in

digannio wrote: »

{text removed by MSE Forum Team}
https://www.standard.co.uk/business/business-focus-too-good-to-be-true-how-highrisk-bonds-are-marketed-to-an-unsuspecting-public-a4035436.html

Well, well, well! Looks like the directors of Surge, London Capital and Finance, RPDigital and perhaps Blackmore Bonds have got more in common than just rugby! The world of financial investment can be quite incestuous!

Jelli

The current holding page for LCF still has in the top left corner...

"Authorised & regulated by the Financial Conduct Authority: 722603"

Gave me a sense of a properly run company before I invested, and it's still a showpiece on the homepage.

sully1311

Jelli wrote: »

The current holding page for LCF still has in the top left corner...

"Authorised & regulated by the Financial Conduct Authority: 722603"

Gave me a sense of a properly run company before I invested, and it's still a showpiece on the homepage.

What you've always got to ask your ask yourself is: Why is the interest rate so much higher compared to others?

When it says things like Capital is at Risk, but then says it's got insurance and asset backed security, alarm bells should be ringing. IMO they contradict themselves (+they've even said it's not covered by the FSCS scheme as well)

When it's too good to be true, it probably is.

masonic

Malthusian wrote: »

Not for corporation tax and other taxes owed by the business, if it's the change in the recent Budget you're referring to. Only on taxes owed by others and collected by companies on their behalf like National Insurance. For taxes owed directly by the business, HMRC is still at the back of the queue with the other unsecured creditors.

I imagine that withholding tax on investors' interest would come under the preferred creditor category, as it is owed by investors and not LCF.

Yes, of course. I am misremembering the Budget changes.

In theory LCF bondholders might rank ahead of HMRC for taxes owed by LCF, as they are supposedly secured creditors, but as secured creditor status is worthless without professional due diligence into the security (which hasn't happened), it's moot. (This applies to both P2P and unregulated investments.) If LCF has no assets then it doesn't matter.

Global Security Trustees Limited (the purported security trustee for the bondholders) holds a debenture over the assets of LCF, but LCF at the time of its last accounts held net assets valued at £298,827 or less than 1% of the value of bonds issued. The initial costs of an Administrator may eat significantly into any such sum. In theory, that debenture extends to book debts, for what that's worth.

It's not yet clear that the charges LCF holds over other companies to which it relent money, by way of regulated loan agreements (as opposed to the unregulated agreements by which it borrowed this money), are sound and enforceable. Absurdly, these borrowing companies have more regulatory protection than bondholders. It could be a lot of work, and very costly, for recovery action to be pursued against each of these companies - and likely futile based on the examples identified in this thread.