Posts

Showing posts from 2019

London Capital & Finance High Court Judgement about GST

The full High Court judgement for the case brought be Global Security trustees to reverse the administrators decision about formation of the Creditors Committee is available at the link below http://www.bailii.org/ew/cases/EWHC/Ch/2019/3339.html A really important part of the summary explains the sums of money paid to the 4 individuals connected to LCF that total nearly £20 million. These are in section 7. The concerns raised by the Administrators in their report about transfers made to connected individuals are illustrated by the table below. Nearly £20 million of bondholders' money was transferred either directly or indirectly to the four individuals concerned. Transfers out Mr Barker  /FONT> Mr Hume- Kendall Mr Golding Mr Thomson /FONT> Charges Total out Date £ £ £ £ £ £ 22/06/2018 411,675.00 2,332,825.00 2,332,825.00 411,675.00 11,000.00 5,500,000.00 03/07/2018 150,448.50 709,827.50 709,827.50 351,296.00 3,850.50 1,925,250.00 23/07/2018 374,250.00 2,120,750.0

London Capital Finance/Global Security Trustees (GST) - Where is their Money Coming From?

Image
The collapse of London Capital and Finance is continuing to give more unexpected twists and turns with a court case being pursued by the administrators against the current trustees called GST supposedly responsible for ensuring that LCF investors' interests were protected. https://damn-lies-and-statistics.blogspot.com/2019/01/lcf-global-security-trustees-capital.html Despite the grand sounding name, Global Security Trustees was a company in name only and was solely responsible as trustee for LCF investors. It had no other role and no money. If you check the accounts for GST then you find that it was not trading and only had nominal capital of £100. You may want to check previous articles about GST which highlighted their unusual ownership which was transferred to a company in Malta early in 2019. The directors/shareholders were also linked to the solicitors that facilitated many of the LCF deals so may be seen as being linked too closely to LCF. London Capital Finance/Global

FCA Ban on Mini Bond Promotions

Image
The FCA have announced action today to stop mini bonds being sold to retail investors and only to high net worth individuals. Strangely enough I thought that was already the case and those buying the likes of LCF bonds had certified that they were eligible. https://www.fca.org.uk/publications/temporary-product-interventions/temporary-intervention-marketing-speculative-mini-bonds-retail-investors The rules that they have brought in seem to be fairly lax and could let some of the current players continue to operate. It appears that Buy2Let cars for example would be allowed to continue because they are promoting their own business despite falling under the same scenario of underplaying the risks to capital that mini bond companies do. So the FCA are making a small step in the right direction but it remains to be seen whether some of those involved in the mini bond market who don't tend to follow the rules anyway take much notice of the new requirements. Let's hope we'

Buy2Let Cars Investment Seminar - Is it a scam?

Image
Buy2Let Cars are running various investment seminars to attract new investors. If you are considering an investment with them and wondering if it is a scam it's worth remembering that the investment has the potential to lose ALL your money as investors in London Capital and Finance are finding out to their cost.  This isn't to suggest that Buy2Let cars are doing anything illegal but the potential to lose all your money is possible for all unregulated bond schemes. There is a full review of Buy2Let Cars on the BondReview website which gives all the information that will help you make a decision but this is NOT a risk free investment and is not covered by FSCS. https://bondreview.co.uk/2018/06/28/buy-2-let-cars-unregulated-investment-in-rented-cars-offering-7-11-per-annum/ The cars apparently funded by these bonds are to people with very poor credit who cannot access elsewhere. Not exactly a low risk proposition! https://wheels4sure.com/bad-credit-car-leasing/

UK Models - Is it a Modelling Agency Portfolio Scam?

Image
A website called UK Models is once again using Google adverts to sell their modelling portfolio services by giving the impression that they are a model agency and can give assessments of modelling potential. UK Models - Is it a Modelling Agency Portfolio Scam? UK models are not a modelling agency. They are a front for photographic studios, previously Blue Rooms/Pure Space studios in London that sell expensive portfolios to wanna-be models. You do not need to buy a portfolio to approach modelling agencies. Although the UK Models website does say that they are not a model agency they also then use the words "Apply Now", "Submit your application" which imply that you are applying to them for something. UK Models are a photo studio selling portfolio shoots at high prices - that's their business. You don't need to apply to shop at Tesco and you don't need to apply to a photo studio to pay them large amounts of money to have a photo shoot. Every

Blackmore Bond Interest Delayed Again

Image
Reports from unhappy investors are suggesting that Blackmore Bond Interest payments have been delayed again. This is now the second time in a row that investors have not been paid their quarterly bond coupon interest and this time a different reason has been given. This time investors have been told in advance by Blackmore Bond that the interest payment due on 31st October will be delayed until 29th November allegedly due to an unnamed development not completing on time. Blackmore Bond Interest Delayed Again Investors are likely to be hoping that this isn't a precursor to Blackmore Bond being unable to repay the capital that becomes due on their bonds in 2020. More details from the Evening Standard here https://www.standard.co.uk/business/blackmore-delays-dividend-payment-to-thousands-a4273341.html

eBay Global Shipping Program Problems - Avoid Like the Plague!

Image
After picking up a friend's car with wrecked engine I've been selling lots of car parts on eBay. All has generally gone well and I've more than covered the cost of the car but the biggest problem and hassle has been eBay Global Shipping programme. When selling on eBay I tend to only sell to the UK, it's much simpler and avoids the hassle of international postage. However when selling car parts I often used the eBay mobile app to list items as it meant I could take photos and instantly list them without needing to upload to my computer. The big, big problem with the eBay mobile app is that it turns on the Global Shipping option by default. What a disaster! I've only had 2 items selling via GSP but both of them have been a nightmare! eBay Global Shipping Program Problems  One item was bought by someone in Italy. All shipped fine and delivered ok but when the buyer tried the part they found it wasn't suitable for a left hand drive car. In the circumstance

Boris Skewered By His Strategy Backfiring?

Image
Has Boris Johnson's outsmarted by MPs and been too clever for his own good? By preventing the government from rushing headlong into a no deal situation MPs have narrowed down Boris Johnson's options but he has now boxed himself in by proroguing parliament which limits the time available to pass legislation that could enable a General Election. The government's attempt to call a General Election via the Fixed Term Parliament Act has failed so other options would be needed but by suspending parliament next week there is unlikely to be sufficient time to do so beforehand meaning an election on 15th October could now be unlikely. Boris Skewered By His Strategy Backfiring? It's an unusual situation with the government wanting to call an election but as the government has no majority with the date entirely now in the control of the opposition who could wait until the most opportune time. Sacking so many Conservative MPs having already lost your majority, proroguin

Boris Johnson - His Secret Brexit Strategy for Parliament?

Image
With the announcement this week that Boris Johnson was proroguing parliament with a new Queen's Speech on 14th October there was one element that seems to have been missed from the discussion about the implications. Theresa May's government brought the Withdrawal Agreement to Parliament where it was rejected 3 times and due to a ruling by the Speaker could not be brought back again for a further vote in that session. I've not seen any mention on the major news channels that the prorogation of Parliament means that a new session begins and with it the opportunity to bring back the Withdrawal agreement for a final time. Despite his current claims of dissatisfaction over the agreement Boris Johnson has previously voted for it so can't be that dead set against it. I suspect that one strategy he may be looking to follow could be to give MPs a final decision between the existing Withdrawal Agreement and leaving with No Deal with the deadline days away piling on the p

Blackmore Bond in Trouble? Late Interest Payments for Investors

Image
Further Update - Weds 14th August - some investors are still saying that they have not yet received their interest due from Blackmore and have had no reply from the company. UPDATE - as of Weds 7th August the interest payment has now been made by Blackmore Bond. Another company promoted by Surge Financial, the agent behind sales of London Capital and Finance was Blackmore Bond. According to reports from investors on the Trust Pilot and BondReview sites Blackmore Bond have been late paying interest due on 31st July. If Blackmore are unable to make interest payments it doesn't bode well for capital repayments due in 2020 Blackmore Bond in Trouble? Blackmore Bond in Trouble? Late Interest payments Blackmore were offering similarly high rates of interest as LCF but claimed they were making returns of over 50% to pay back investors as well as their 25% commission fees to Surge Financial. Time will tell if they are going the same way as LCF and heading for administrati

Store First Administration - Is it Bad News for LCF investors?

Image
Bond Review has reported that Park First has filed for administration  and that Smith & Williamson have again been appointed as with LCF. The news suggests that the investors may have between £120 and £190 million invested with the company. Park First offered airport parking spaces for sale with "guaranteed" returns of 8% which investors are now finding to be nothing of the sort. This follows their previous venture Store First which made similar claims and left many investors seriously out of pocket. Park First administration - investors to lose again? As well as London Capital & Finance which went bust with £237 million of investors money outstanding there is also £30+ million from Harewood Associates and various other failed investment schemes that have gone into administration this year with a total in excess of £500 million. Along with Blackmore Bonds that has delayed filing accounts and stopped taking new investments which may raise questions from invest

How Did London Capital & Finance (LCF) Take Hundreds of Millions of Investors Money?

Image
London Capital & Finance was based in Tunbridge Wells and grew massively from 2015 with over 11,600 investors placing their money at rates up to 8% How does a small unknown company based in a sleepy Kent town grow from nothing to take £237 million from savers in 3 years? I think it essentially boils down to two words – name and service. The people behind London Capital & Finance (LCF) may have been running a Ponzi scam but they appear to have thought very carefully about how they planned it and made sure that they appealed to their target audience. In my view the LCF story was by no means accidental, it had a serious amount of planning to make sure that they obtained the maximum money for as long as possible. Once things have reached the courts I suspect it would make a gripping TV drama with the personalities involved. The Slick Sales Operation That Took £237 million from Savers LCF were very clever to choose a name that associated them with the City of Londo

FSCS Claims for LCF Investors

Image
In news that will be welcomed by London Capital & Finance investors the FSCS have announced that claims by some investors may be accepted as they have reason to believe that advice may have been given. They have provided a questionnaire to gather more information about how many investors this may affect. https://www.fscs.org.uk/failed-firms/lcf/ This could mean that some LCF investors get their money back up to £85k which still means that others with investments above that could lose out as well as others that didn't receive advice. However the LCF website did show that FSCS cover did not apply and that the investment involved risk of losing their money which some investors seem to have missed. The advice element may refer to sales allegedly made by John Russell Murphy who a number of LCF investors have claimed met them to conclude sales of LCF bonds.

LCF Mini Bonds or ISA? Investor Confusion over FCA Terminology

Image
There have been reports that some investors in London Capital and Finance are unhappy with the use of the term "mini-bond" to describe what they purchased from LCF. However the reports just highlight further the confusion from many investors over what they actually bought. Many people seem to have little understanding of the structure of an ISA and that it is only a tax wrapper rather than a product in its own right. It's partly understandable as most people have no knowledge of ISAs other than cash ISAs. The London Capital and Finance website also didn't help matters by listing ISAs and bonds separately - in reality they are invested in exactly the same product but the ISA just has a tax wrapper around it meaning no tax is due on any income from it. LCF Mini Bonds or ISA? Investor Confusion over FCA Terminology The screenshot above shows the LCF website that doesn't make clear that the ISA and bond contain exactly the same mini bonds and that the only

Barbican ISA Bond Review - Is it a Scam?

Image
One of the latest ISAs being advertised by Review My ISA is called Barbican ISA claiming to offer a fixed rate of 7%. However if you look at the small print you will find out some worrying details. Barbican ISA Bond Review - Is it a Scam? Despite the claim that the ISA is regulated and authorised by the FCA it is important to note that this product is not protected by the FSCS so you could lose all your money if the investment goes wrong as investors in London Capital and Finance have found to their cost. This ISA is promoted on Facebook by "Mark's Money Matters" who seem to have a track record for promoting misleading investments that are listed as savings. The key point is that despite all the references to SAVINGS this is not a savings product but an investment where you can lose all your money and the value is not guaranteed. Even the interest rate is not fixed as they could go bust before the end of the term as LCF did. We are not suggesting that Barbican I

Boris Johnson & Brexit NHS £350m Court Case

Image
After all the posts about London Capital and Finance this is finally another blog post more in line with my original intention for this blog. The fascinating news today is that Boris Johnson has been found to have a case to answer and will be facing court for charges of "Misconduct in Public Office" over his claims during the EU referendum that the UK pays the EU £350 million every week. Depending on the signage this claim was either that we could spend some on the NHS or as the sign below shows, spend ALL of it on the NHS. Boris Johnson & Brexit NHS £350m Court Case Boris Johnson had several opportunities to correct the numbers and was warned by the Office for National Statistics that the number could not be justified but he carried on using the £350 million figure. Rather than apologising he has repeatedly continued to state the number refusing to accept that it is incorrect and not grounded in reality. It will be interesting to see how the court case develop

LCF Properties Assets Frozen by Serious Fraud Office

Image
Jim Armitage of the Evening Standard has reported that various people linked to London Capital & Finance, some of whom were arrested by the Serious Fraud Office in March 2019 have had property & assets frozen so that they are unable to sell or transfer them. The names associated with these freezing orders will be familiar to anyone who has been following the LCF saga and include the CEO of LCF Andy Thompson as well as Simon Hume Kendall CEO of the largest borrower from LCF. LCF Properties Assets Frozen Fraud Office https://www.standard.co.uk/business/serious-fraud-office-freezes-12-million-of-property-in-lcf-probe-a4143896.html

LCF Trustees Acting Against Bondholders

Image
The London Capital & Finance saga took another bizarre twist this week with the trustees called Global Security Trustees (GST) that are supposed to be protecting the bondholders interests (as they hold a debenture in favour of bondholders) voting against the proposals to form a creditors committee. You may remember from previous blog posts that there were some strange goings on with GST. The trustees had been sold to a company based in Malta but are now run from the UK again. The directors of GST have yet again changed and are now Jeremy Friedlander, Stephen Gill and Mark Pollard. Jeremy Friedlander is also one of the shareholders of GST. LCF Trustees Acting Against Bondholders In another twist GST claimed to be representing holders £57 million of bonds. It's not clear how they were able to do that when they have no assets themselves other than £100 but I suspect they were able to engineer proxy votes for chunks of investors. It could even be that somewhere in the LCF

Signature Capital Review - Is it a Scam?

It looks like Signature Capital are very keen to get threads removed from Money Saving Expert that give information about their investment schemes. An original thread as listed below has been deleted. A new question is here https://forums.moneysavingexpert.com/showthread.php?t=5991993 This was the original post. Personal names have been removed as per MSE legal policy but can be easily obtained on Companies House. Quote: Originally Posted by  RaymondV I’m looking to invest and have signed up to a number of offers. I keep getting regular emails from one group in particular, Signature Capital from Liverpool. Has anyone heard of this group? The offers are all similar and high yield 12% +. A quick search on Companies House shows the company trading less than 1 year. Interestingly the Director Lawrence Kenwright holds 33 appointments but none preceding 2016. The company boasts projected profits of £37.5 million for 2017/18. That seems quite high for a new company. I got an emai

LCF Saga - Another One Bites The Dust

Image
The saga of London Capital and Finance and their borrowers shows no signs of going away. It's been fairly quiet on the blog front recently but primarily because the mainstream media have finally started to cover the story. LCF Another Borrower Bites The Dust One bit of news this week is that another borrower of LCF has gone into administration making three companies now being run by administrators including LCF. After London Oil and Gas, the largest borrower from LCF with £122 million went into administration a few weeks back, a linked company London Power Corporation run by Simon Hume Kendall and Elten Barker has now filed for administration too. Having borrowed £122 million from LCF, London Oil & Gas loaned £16.6 million to a company to buy shares in London Power Corporation. That money is presumably now at risk too. The dominoes are all falling down around the web of LCF linked companies.

FCA ISAs WarningToo Little Too Late

In what will be considered extremely poor timing by the investors in LCF a warning has been posted on the FCA website to let people know that Innovative Finance ISAs are risky. In a statement of the blindingly obvious to seasoned investors it is frustrating to see that it's taken them so long to act and publish such a bland statement. Rather than posting a Press release on their website they should be ACTING and dealing with the companies that are using FCA authorisation to promote high risk products to consumers. We have seen evidence that Innovative Finance ISAs (IFISAs) are being promoted alongside cash ISAs. Investments held in IFISAs are high-risk with the money ultimately being invested in products like mini-bonds or peer-2-peer investments.  These types of investments may not be protected by the Financial Service Compensation Scheme so customers may lose the money invested or find it hard to get back. Anyone considering investing in an IFISA should carefu

London Capital Finance - What Did FCA Authorised Mean?

Image
London Capital Finance made the "FCA Authorised" claim on its marketing materials and website but this was meaningless for most investors as the bonds that they bought were not covered by the FCA authorisation and are not protected by the FSCS. So what exactly did the FCA Authorised and Regulated mean? London Capital Finance - What Did FCA Authorised Mean? If you check the details you'll see that LCF was only authorised and regulated for credit activities so for making loans to businesses. It does raise the question of what exactly the FCA were even doing to regulate London Capital Finance for these activities when the administrators report is so damning about the loans that LCF made. If FCA were meant to be regulating LCF for the loans that were made then that seems to be another failure of their regulatory process when loans can be made to companies such as: One that has no bank account Companies that have no assets as security Companies that have never

21st Century Regulation Failures

Image
You'd expect that in the 21st Century as we become more knowledgeable with much better access to information and scientific advances that we would avoid obvious failures with regulations being ignored but again this week it's clear that isn't happening. 21st Century Regulation Failures Any followers of this blog will be well aware that the London Capital & Finance failure shows the complete lack of effective regulation by the Financial Conduct Authority in the UK to protect savers from losing money to investment scams. To have nearly £250 million of savers money invested in an unregulated investment company that could claim to be regulated and market their products as safe ISAs when the money was being systematically siphoned from the company is an appalling reflection on the state of our financial regulations. It appears that it isn't just the FCA that is at fault but that the auditors of the company also failed to highlight that LCF was technically insolven

Grounds Investments ISA Review

Image
Another ISA product being promoted by the website that previously plugged the LCF ISAs and bonds is called Grounds Investments. This is an IF ISA so your money is at risk. It is not a cash ISA and is one where you could lose your entire investment should the company fail. It's generally a good idea to make sure that the company you are giving your money to is secure and has a good track record. Grounds Investments ISA Review According to their website Grounds Investments is the UK arm of a German residential property company and they claim to have been operating for 12 years. However the key part is not how long the German company is trading but the history of the UK company Grounds Investment PLC that you will be handing your money to. If you check out the details for Grounds Investments PLC you will see that they have not even been in existence for a year, they were only registered on 14 February 2019. Grounds Investments PLC history If you are looking for a h

London Capital Finance Insolvent in 2017

Image
According to today's FT, LCF were insolvent as far back as 2017. The FT used an accountant to analyse the published accounts which suggests that LCF had negative assets of almost £10 million in 2017. According to the quote in the FT: “LCF was effectively insolvent almost from the beginning,” said Tim Bush, head of governance and financial analysis at the shareholder advisory group Pirc.  It begs the question of how two major accountancy firms could sign off their accounts as auditors when the picture was so misleading. Could there be a way for investors to claim against them for their lack of warning of the state of the company? https://www.google.com/url?rct=j&sa=t&url=https://www.ft.com/content/09df4f72-5222-11e9-9c76-bf4a0ce37d49&ct=ga&cd=CAEYACoUMTQyODE3NjU4NzU3MjQ0MzI1MzEyGjdlMWYzMmUxZDI0OGNkMzE6Y29tOmVuOlVT&usg=AFQjCNHCLOGcwRKsqVtWcG6Uybvg5siXhg