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London Capital and Finance

edited 1 September 2016 at 2:14PM in Savings & Investments
2K replies 424.7K views
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  • SledgerSledger Forumite
    94 posts
    I have been onto the FCA sevearl times regarding their role and powers in their investigation and what clout if any they had . I have trouble navigating around things so thank you bailin for post 547 and 548 which gives some confidence if things go pearshape which the FCA could have easily steered me to in particular this one.

    This Practice Note explains the offence of causing a financial institution to fail under the Senior Managers and Certification Regime (SM&CR) created by the Financial Services (Banking Reform) Act 2013 (FS(BR)A 2013). It covers the elements of the offence under section 36 of FS(BR)A 2013, key definitions and the investigation and prosecution of this offence. The Practice Note also explains the investigatory regime created by the act and offences of falsifying, concealing or destroying evidence under section 90 of FS(BR)A 2013 and disclosing confidential information under section 93 of FS(BR)A 2013.
  • jimjamesjimjames Forumite
    13.6K posts
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    There's some more detail on a company that LCF appears to have loaned money to.

    It seem they have lent some or all of £5.7 million to a company called CV Resorts registered at the same address as LCF that has never traded and has made no payments to the loans in the last 4 years. Something is seriously amiss with their business!

    https://damn-lies-and-statistics.blogspot.com/2019/01/london-capital-finance-have-loans.html
    Remember the saying: if it looks too good to be true it almost certainly is.
  • edited 9 January 2019 at 8:44PM
    SledgerSledger Forumite
    94 posts
    edited 9 January 2019 at 8:44PM
    It seems the 200 million is a under estimate.


    FCA have just warned all CEO about misleading advertising and LCF gets a feature

    The warning comes in the wake of the FCA’s investigation into London Capital and Finance, which has meant uncertainty over the outcome of 14,000 customers’ investments, worth around £250m, in LCF’s mini-bonds. While LCF is regulated by the FCA, mini-bonds are not regulated products, meaning investors have no recourse to the UK’s Financial Services Compensation Scheme and could be wiped out if LCF defaults.


    What is totally unacceptable here is the business Model gives the impression the Loans go to real companies with assets similar to Lending Crowd etc . It appears they lent it to themselves with no real assets. How Did Ernst Young verify thatr big chunk of value of secured 284.75 million assets in the accounts.
  • edited 22 February 2019 at 3:28PM
    SledgerSledger Forumite
    94 posts
    edited 22 February 2019 at 3:28PM
    and that value of assets of 284.75 million was back in April 2017 against 60 million of loans, Where did {Text removed by MSE Forum Team} come up with that figure and what asset figure would he put against 250 million worth of bonds if they had submitted proper accounts on time
  • edited 22 February 2019 at 3:29PM
    jimjamesjimjames Forumite
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    edited 22 February 2019 at 3:29PM
    Sledger wrote: »
    What is totally unacceptable here is the business Model gives the impression the Loans go to real companies with assets similar to Lending Crowd etc . It appears they lent it to themselves with no real assets. How Did Ernst Young verify thatr big chunk of value of secured 284.75 million assets in the accounts.

    Good question but bear in mind many of the companies used are classed as micro cap or small so don't need to have any audit of their accounts.

    When you look at the known facts about LCF it doesn't look very good. I don't think any of these are in dispute but feel free to correct if you disagree

    1) Deliberately promoted unregulated bonds to unsuitable investors they knew were not high net worth and used phone calls to complete the transactions telling people that they were protected
    2) Knowingly used the ISA label to imply cash ISAs alongside claiming they were FCA authorised to give protection to the investment
    3) Repeatedly changed their accounting dates to avoid submission of accounts and any scrutiny
    4) Lent money to associated companies registered at the same address and with the same directors
    5) Director {Text removed by MSE Forum Team} was suspended as solicitor for his work on a carbon credit scam that he agreed was a "dubious investment"
    6) Directors requested companies be struck off by Companies House that had money owing to LCF or asset charges that had not been cleared
    7) Loans made to brand new companies with no assets and no history - the opposite of their claims in marketing materials
    8) Loans made to non trading companies that had no income for the last 4+ years
    9) The company named as the Trustee for the bonds, the impressive sounding GLOBAL SECURITY TRUSTEES LIMITED is a dormant company with assets of £100.
    10) As of April 2018 the majority owner of GLOBAL SECURITY TRUSTEES LIMITED is based in Malta

    It's also been suggested that FCA taking action as they have done is a more serious sign. If they weren't worried then they could have used a voluntary undertaking rather than enforcement.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • edited 9 January 2019 at 10:13PM
    SledgerSledger Forumite
    94 posts
    edited 9 January 2019 at 10:13PM
    1), and 2). A little bit of misleading advertising is of no consequence if your business model is sound and adhered to which 3-8 demonstrates it borders on fraud. So I assume FCA will act on 3-8 as its in their scope and its irrelevant where the funds are sourced from a piggy bank, FCIS protected money or mini bonds ( not FCA regulated) whatever. Tracing and recouping the funds via thumbs screws to get it back as the bulk of this 250 million is somewhere . Not just say its sourced from mini bonds out of FCA scope ie to quote " mini-bonds are not regulated products, meaning investors have no recourse to the UK’s Financial Services Compensation Scheme and could be wiped out if LCF defaults."
  • On a separate issue all these previous posts about 8% to good to be true, I am with Lending Crowd and can select who I invest with and check the security assets normally something like a chicken farm on land in case of default or the Director puts up his house as security. I average over 8% and no defaults as yet just a few late payments. I thought LCF were lending to real companies with solid assets as the Ernst Young audit implies. To loan to themselves appears to be a serious violation and how come Ernst Young never picked this up.
  • jimjamesjimjames Forumite
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    Sledger wrote: »
    1), and 2). A little bit of misleading advertising is of no consequence if your business model is sound

    Personally I don't see selling bonds to unwitting investors thinking they have security of capital and are placing their life savings into a scheme where they could lose 100% of their money counts as being "A little bit of misleading advertising" and "is of no consequence".

    Even if it's not fraudulent you can still lose all your money with LCF. Investing 25% of the bonds into oil & gas exploration is highly risky, other money was invested in timeshares. Have you seen the oil price over the last 5 years?

    https://www.macrotrends.net/1369/crude-oil-price-history-chart
    Remember the saying: if it looks too good to be true it almost certainly is.
  • masonicmasonic Forumite
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    Sledger wrote: »
    On a separate issue all these previous posts about 8% to good to be true, I am with Lending Crowd and can select who I invest with and check the security assets normally something like a chicken farm on land in case of default or the Director puts up his house as security. I average over 8% and no defaults as yet just a few late payments. I thought LCF were lending to real companies with solid assets as the Ernst Young audit implies. To loan to themselves appears to be a serious violation and how come Ernst Young never picked this up.
    It's a very different situation when you are lending directly to actual borrowers and can verify charges taken out against assets, and are provided with valuations, which you can critically evaluate vs. lending to a small company who tells you it is re-lending the money, but refuses to disclose any details.

    Having said that, you should expect there to be defaults in the future at LC, and it is likely that some of those defaults will lead to a loss of the majority of your capital, as has been seen on most other P2P platforms offering similar rates. It's just a matter of time.
  • so where is the bulk of the 250 million gone.it has to be somewhere and surely FCA should be sourcing it . Maybe FCA or our authorities should set up a 1* sort of Ritz Carlton in Bodmin Moor, round them all up, keep them isolated and detained for months until the money comes back. All those Princes coughed up and keep very quite about the regime and have not heard any western criticism to this method of retrieving corrupt money .
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