London Capital and Finance

masonic

jimjames wrote: »

All change at the security trustees. No longer owned by a Maltese company the shares are now owned by the directors

https://damn-lies-and-statistics.blogspot.com/2019/01/lcf-global-security-trustees-changes.html

This might have been good news if it were a result of action by the FCA, but it seems to pre-date FCA involvement, so I'm reluctant to read much into it.

I don't think there is much likelihood of LCF being classed as in default because of the FCA restrictions. If you compare to the situation of DotComUnity credit union, who were locked down by the PRA a few years ago and prevented from making repayments of capital/interest, the firm was allowed to continue in that state for several months before it was finally placed in administration.

If the FCA determine LCF don't have the capacity to repay bondholders, then insolvency will no doubt result, but we don't seem to be there yet.

jimjames

masonic wrote: »

If the FCA determine LCF don't have the capacity to repay bondholders, then insolvency will no doubt result, but we don't seem to be there yet.

I've heard a suggestion that someone may have already petitioned to put LCF into administration but they have been given 4 weeks to sort things before that. I've not seen official confirmation of this yet.

System

I wonder if the company selling this and Blackmore bonds product...Surge in Brighton, is now selling the Cauta Capital Bonds that have just sprung up...the sites have a similar look and feel, although cauta in tiny writing warns that only sophisticated investors should be considering.


Also, have seen this which makes blackmore sound good...https://innovativefinanceisa.org.uk/providers/blackmore/. I wonder if its written by the company itself somehow, like those ones by rpdigital.

Jelli

Surely every sophisticated investor avoids these products, no? They seem to be aimed at the unsophisticated public because only they don't have the expertise to check things out. A sophisticated person would see the flaws within a short time.

jimjames

Jelli wrote: »

Surely every sophisticated investor avoids these products, no? They seem to be aimed at the unsophisticated public because only they don't have the expertise to check things out. A sophisticated person would see the flaws within a short time.

Absolutely. They're supposedly aimed at sophisticated investors but like you say anyone experienced wouldn't touch it and would use alternatives like stock market investments instead. An inexperienced investor would select something like LCF bonds because they think they are guaranteed yet would be better off using stock market investments that are safer. Ironically they will avoid the share based options because they correctly list the risks and capital not being guaranteed but the unregulated option doesn't so they think it's better.

It's a real flaw in the current regulations that really needs to be addressed before thousands more people are affected as per LCF.

Botheredin

First post so apologies if any etiquette is off.

If I have this right Surge Group is a partner / sister company with RPDigital and both are based in Brighton.

Somewhere between the two they operate landing sites powered by paid search which did put up LC&F as a bond company offering what are seemingly “too good to be true” returns and then compared LC&F to “standard” operators of regulated ISA’s offering much lower rates, albeit with these investments being protected, whereas LC&F’s bonds were not.

Some £190m+ has vanished into LC&F and no one knows what is happening with it after the FCA freeze and that more than 80% of their referrals of investors came from sites operated by RPD, Surge or both.

LC&F then gets shut down, temporarily or otherwise, by the FCA.

Co-incidentally, or not, in the same month LC&F are told to stop the adverts and marketing traffic and referrals from the same sites they got their leads from ceases. Remember, these are the sites operated by RPD and maybe Surge.

Traffic from those same sites then leaps to refer to Blackmore Bonds and Blackmore sees a staggering 500%+ jump in traffic.

The above can be verified on Similarweb by searching both LC&F's performance and Blackmore's over the last month or so. Sorry, can't post links as a noob.

Then, following the Evening Standard article on January 10th 2019 all paid search for both Blackmore and LC&F relating to the sites operated by RPD / Surge vanishes from the top Google Adwords terms these sites were using.

Furthermore, it appears that many, if not all, of the directors of these companies have gone to great pains to not appear on traceable addresses on electoral roles, Companies House etc etc. yet are tootling around in Ferrari’s, Aston’s, private helicopters and sponsoring low profile horse eventing meets for big, big money.

Not mention the loan books some of these guys have… Oil companies that have no pipeline and assets 5 miles under the ocean that are unreachable, holiday businesses in Cornwall who are in for £38m in loans (anyone know a holiday business in Cornwall that can return 8% to original investors on £38m?) plus who knows what else…

My prediction is this.

The money has been suckered in, lent to themselves and their mates with the “interest” payable to investors front loaded onto the loan.

The only way this then works is new money coming in to pay back original investors… which now is not coming in.

I fear some people are in for a nasty shock over the next few weeks and that they should never have been put in this position. They, of course, are the investors.

Doubtful that the shock will apply to these “company directors / fund managers” or to the “regulators” paid out of tax payer funds to watch and control this type of behaviour.

jimjames

Botheredin wrote: »

Not mention the loan books some of these guys have… Oil companies that have no pipeline and assets 5 miles under the ocean that are unreachable, holiday businesses in Cornwall who are in for £38m in loans (anyone know a holiday business in Cornwall that can return 8% to original investors on £38m?) plus who knows what else…

It's interesting you should post about oil exploration. There's a bit of digging into one of the companies that has been lent money via LCF. At the point the LCF money was being lent the company said "Atlantic Petroleum acknowledged that should the talks fail, the company might go into administration." Hardly great security for a loan.

https://damn-lies-and-statistics.blogspot.com/2019/01/london-capital-finance-never-defaulted.html

It then turns out that the loan has been converted into equity in Atlantic Petroleum. So if the loan has not been repaid and is not getting any interest, how are the returns being made to investors?

Botheredin

It's simple (allegedly), the loans made are for capital sums with a calculation of the interest over 3-5 years added to the "loan". The additional amount is then paid back to the investors, essentially their own money, whilst new money comes in at the top from new investors.

The fund managers run this until it goes pop. Allegedly.

Now that no new money is coming in... well, we will have to wait and see.

jimjames

Botheredin wrote: »

I fear some people are in for a nasty shock over the next few weeks and that they should never have been put in this position. They, of course, are the investors.

I agree. It's sad that so many novice savers have been caught by this outfit. It's also surprising at the level of denial that anything is wrong and that it's all the fault of the FCA.

LCF have lied about the product being an ISA
LCF have lied about FCA protection
LCF have lied about the risks involved
LCF have lied about the level of security
LCF have misled investors about the requirement to be high net worth etc.

Out of these items the one that many investors seem to be focused on is item 1 which is not massively serious in my view and could just mean tax being payable on interest.

The most serious ones are the other 4 items which don't appear to bother many people. To me these are the real issues where people have put their life savings into something that is high risk and could lose all their money even if it's not fraudulent and a lot of bondholders still seem unaware of the risk they have taken.

londoninvestor

And:
LCF directors have chosen borrowers based on their own interests in the borrowing companies, not their ability to repay