Thoughts on Finance, Current Affairs and General Consumer Ripoffs - Damn Lies and Statistics

Dear Sir / Madam, London Capital & Finance Plc (in administration) (‘LCF’) We are writing to you, as you are a Bondholder of LCF. On 30 January 2019, LCF entered into administration. Finbarr O’Connell, Adam Stephens, Colin Hardman and Henry Shinners of Smith & Williamson LLP were appointed Administrators of LCF. This email has been written by the Administrators to you to update you on the position with regard to the administration of LCF. There has been some press and social media comment about LCF and LCF’s prospects in recent weeks but we appreciate that the fact that LCF has gone into administration is likely to come as a shock to you. We are very mindful of Bondholders’ (and other creditors) understandable concerns about the current situation. What we are doing Our work is at an early stage. We are already working with the Company’s existing staff and LCF’s borrowers to ascertain what needs to be done in order to maximise the returns to the Bondholders. We are especially fo

What happens if I had an ISA with London Capital & Finance? If you had an ISA with LCF then that ISA allowance is entirely dependent on the amount that is eventually recovered by the administrators. LCF call centre staff appear to be claiming that LCF is not insolvent and "it's only administration". That claim is completely contradicted by the FCA statement on London Capital Finance today  that clearly says the Directors of LCF realised it was insolvent so called administrators in. London Capital & Finance ISA - What Happens Next? Some people had transferred large sums from cash ISAs to LCF, in some cases, many tens of thousands of pounds encouraged by the promise of high rates of return and misled by the advertising that suggested it was safe and FCA regulated. Unlike a cash ISA where your allowance is a fixed amount so if you pay in the annual ISA allowance of £20,000 you can then transfer the £20,000 plus interest to another ISA provider, with inve

LCF Administration Announced  It won't be a surprise to anyone reading this blog but on 30th January 2019 London Capital & Finance was declared insolvent and the High Court appointed administrators to manage their affairs and recover any money for bondholders and creditors. The announcement says that LCF was insolvent as a result of being unable to obtain money from new investors. It does raise the question why new investors money was required to remain solvent which sounds like the hallmark of a Ponzi scheme where new investors pay the interest or capital of those investors due their money back. If you've read the posts here over the last month you would be right to wonder if there is any value in the company that the administrators will be able to get for the bondholders. They've said it may take another 8 weeks to find out the situation with the company assets which will be a nerve wracking time for investors in the company. Sadly I suspect many investors will

One of the claims that London Capital Finance have made is that their loans have never defaulted and they have claimed a 100% track record. That statement seems rather suspect when you look at some of the loans made to companies that were ultimately funded by LCF. One example is Atlantic Petroleum based in the Faroe Islands. It had an agreement to borrow £8 million from London Capital & Finance via a company called London Oil and Gas (LOG). LOG borrowed £50 million from London Capital Finance and have loaned money to at least 2 small oil exploration companies, Atlantic and another called Independent Oil and Gas. The key one to look at is Atlantic Oil & Gas. In a statement made in March 2017 but not fully reported at the time they stated: Atlantic Petroleum restructures debt. It further adds that at the time the loan was made, Atlantic Petroleum were trying to avoid going in to administration (the company going bust) London Capital Finance - Is it true Borrowers Neve

According to FCA and other reports it appears that London Capital & Finance had over £200 million in unsecured bonds from investors outstanding when the FCA froze their accounts. So where has this money gone? According to LCF they had 11 borrowers in 2017. We don't know the latest numbers as they have defaulted in filing their accounts for 2018.  However we do know that there are public records of how much money has been loaned to certain companies. In particular one company called London Oil & Gas has borrowed £50 million from London Capital & Finance so nearly a quarter of all the bond money has been committed to this one company. That seems incredibly risky especially when oil and gas exploration is known for a roller coaster ride. Out of this money £38 million has been committed in a loan to a company called Independent Oil & Gas (IOG) which is listed on the London Stock Exchange. £30 million has already been paid out to IOG. This information is shown o

A company called Just ISA are advertising on Facebook for an ISA offering 8% interest. It's important to remember that this is not a cash ISA and the rate is not fixed. If the company fails you will not get your interest and may lose 100% of your capital. This is an Innovative Finance ISA where your money is at risk and is NOT protected by FSCS or regulated by the FCA. Is the Just ISA - Invest in Justice Genuine?

I've previous reported about the valuation of a company  called CV Resorts Ltd that was lent money by London Capital & Finance and suddenly had a massive boost to the value of its assets at the same time. CV Resorts Ltd had an increase in valuation of £23 million at the same time as being loaned £5 million by LCF. CV Resorts Revaluation - Asset Impaired? The company that was linked to CV Resorts was called Waterside Villages Ltd. According to this news article in 2015 it was planning a massive expansion with investment from China to invest £250 million to create "the largest and most desirable private waterside village in Britain" Could this failed investment be the reason why? However by late 2017 the plans had been dropped. Shortly afterwards CV Resorts announced that its assets had been impaired and the valuation would be revised in due course. In suspect that this is a prelude to writing off the investment and loan in the company. Note that CV Res

It's all change at Global Security Trustees Ltd, the security trustee for London Capital and Finance who hold a charge over all the assets of LCF. If London Capital and Finance goes into administration it's the trustees who are meant to look after the interests of bondholders. LCF Global Security Trustees Changes - Jan 2019 Until recently the owner of Global Security Trustees Ltd was a company based in Malta called Oracle Limited. As of 28th January they have sold their shareholding in the company to the two directors of Global Security Trustees Ltd who are Jeremy Friedlander and Alexander Lee. Why do this now? It's likely that London Capital and Finance will be classed as officially in default this week as they have now failed to pay interest or capital to bondholders for over a month so it might be a way to try to take control of the situation where LCF goes in to administration. These changes supposedly happened on 1st November 2018 but have only been notif

A lot of people hear the word ISA and either aren't sure what one is or immediately think of a cash ISA savings. Some unscrupulous providers are taking advantage of this confusion and selling high risk bonds as if they are cash ISAs without making clear that they are not FSCS protected and could lose an investor 100% of their money. A fixed rate ISA isn't a type of ISA - so very misleading advert! What Different Types of ISA are there? So what different sorts of ISAs are there? An ISA is effectively just an account that is tax free and anything you put inside it is free of tax on income (interest) or capital gains. There are a number of different types of ISA but they essentially boil down to 3 different types of product you can have inside them. The standard ISA allowance is £20,000 per year which can be split between any of the 3 types below. There are different limits for Help to Buy and Lifetime ISAs as well as Junior ISAs. Cash ISA Most people would only thi

My Club ISA Bond Review Review Your ISA are offering a new product called My Club ISA. Is it worth buying? https://forums.moneysavingexpert.com/showthread.php?t=5906865 Your capital is at risk. Please be aware when investing that your capital is at risk and the value of your investment can go down as well as up. You may get back less than you invested. It's an investment product with the potential for 100% loss of capital. If you look in the  only  link on the page SELF-CERTIFIED SOPHISTICATED INVESTOR STATEMENT I declare that I am a self-certified sophisticated investor for the purposes of the Financial Services and Markets Act (Financial Promotion) Order 2005. I understand that this means: I can receive financial promotions that may not have been approved by a person authorised by the Financial Services Authority; the content of such financial promotions may not conform to rules issued by the Financial Services Authority; by submitting my details through h

Updated 28 January 2019 A lot of concerned investors are asking why did the FCA act to stop LCF marketing their bonds and then stop the company from dealing in their assets and freeze their bank accounts? The FCA have now released more information about the issues that led them to force LCF to remove their marketing and it boils down to how badly they have misled consumers with the bonds they were selling. The information below was published on 9th January and has proved to be an accurate summary of why the FCA acted although I'd not spotted the invalid ISA issue. In addition I suspect that further to these reasons once LCF had got to the size of £200 million plus it was becoming too big to ignore. Guaranteed returns of 8% just aren't possible long term so FCA must have known that something was going on with the way LCF was operating and that's why they announced they were freezing the LCF assets and bank accounts. In order to generate 8% interest the capital has

Cauta Capital are advertising on Facebook with the headline "Want to grow your money in 2019? Earn high fixed returns of 11% with the Cauta Capital Bond." As with London Capital & Finance these bonds are not guarantee d, your capital is at risk and they are not FCA regulated and the bonds are not FSCS protected so you could lose all your money. Cauta Capital Bond - Safe 11% Bonds or a Scam? What are the risks? Shockingly the details make absolutely no mention of your capital being at risk and no mention of not being FCA regulated or FSCS protected so invest at your peril! As with London Capital & Finance there is no mention of past performance not being a guide to the future. Claiming 100% track record is irrelevant - if they had defaulted then they would have already gone bust. To add to the poor appearance of the Cauta Capital Bond they can't even spell principal correctly. A legitimate company would ensure that their adverts were correct before

After the notice issued by the FCA about London Capital and Finance where investors are currently waiting to find out if they will get their money back from the company the warnings by the FCA are equally applicable to Blackmore Bonds that use the same methods as LCF to attract new business. Both companies used websites called Top ISA Rates or Best Savings Rates to promote themselves. These sites are specifically used to target investment into the high risk bond products by promoting the bonds alongside savings accounts. Blackmore Bonds Warning - How Safe Are They Really? The FCA were scathing about the promotion of these bonds alongside cash ISA and savings products with no mention that there was no similarity between them. Savings accounts are safe and protected by FSCS but Blackmore bonds are high risk unprotected, unregulated investments where you can lose ALL your money.

London Capital & Finance - Is Your Money Safe? A Clear Example of Mis-Selling After the FCA Regulatory Notice about LCF published on 23 January many investors are focusing on the first part of the FCA statement that the bonds offered by London Capital & Finance were not ISA compliant so are now taxable. If you are an investor in LCF Bonds worried about your investment then I would urge you to join  London Capital Finance Action Group  on Facebook. There is another Facebook group that may be linked to LCF themselves that many bondholders are reporting they have been blocked from and had their posts deleted. Although this is obviously a key point for investors as it means they are liable to pay tax on the interest they have received from LCF and have effectively lost their ISA allowance for any years that they have contributed to the LCF ISA product, I don't think it's the most important part of the FCA notice. The critical issue for many people is wondering if

FCA have published a notice about LCF on their website today giving details of the Supervisory Notice that was issued to London Capital Finance on 17th January. It confirms that the first Supervisory Notice was issued on 10th December 2018 shortly before the news was made public that all their marketing had to be withdrawn. The key finding from the notice is this statement from FCA: The FCA considers that LCF’s communications in relation to its “Fixed Rate ISA or Bond” were misleading, not fair and not clear It also confirms that the ISA issued by LCF was non compliant so anyone who invested money in it is liable to pay tax on the interest received. This may be the least of their worries if the company continues to not be able to pay investors money back. https://www.fca.org.uk/publication/supervisory-notices/second-supervisory-notice-london-capital-and-finance-plc-2019.pdf I had not realised that the LCF bond was not ISA compliant but I had reported most of the other issues

London Capital & Finance claimed in the marketing that their bonds were "fully asset backed for security" and were protected by a Trustee who would enforce the security for bondholders. This trustee company just happened to be registered at the same address as LCF. As of 22 January 2019 London Capital & Finance have transferred the management of their £200 million bond & loan business to   GLOBAL SECURITY TRUSTEES LIMITED. This  is a dormant company with assets of £100 and registered at the same address as LCF with directors that have also served at LCF. As of April 2018 the majority owner of GLOBAL SECURITY TRUSTEES LIMITED is based in Malta, a company called Oracle LTD , nothing to do with the huge Oracle Corporation of USA.  Why would the owner of a dormant Trustee company with assets of only £100 need to be based in Malta?  If the Trustee is owned by a different company outside the UK, could they just walk off with the money of the bondholders? A

A company called Pegasus Property Investments are offering what they call an ethical investment in Mortgage Litigation funding that they claim returns growth of 40% or more. They fail to tell you that this is a high risk unregulated investment that is not protected by FSCS so there is the potential for you to lose all your money. Unfortunately they give limited information on the adverts and seem to be pushing people to register their details which I've not done yet. Suffice to say it's not something you should consider if your key priorities are safety and security of your money. The adverts say your money is fully insured but fails to warn you of all the potential reasons why this insurance may not pay out in the event of a claim. Pegasus Property Mortgage Litigation Investment - Is it Real? It's important to realise that the Financial Conduct Authority (FCA) has ordered lenders to work out who is affected, and how much they are owed." The article also sa

London Capital & Finance have announced today that the board of Directors has passed management of the company to Global Security Trustees Ltd. It's too early to know exactly what this means and if it is a good or bad sign but remember that Global Security Trustees is run by a company in Malta so the assets of LCF are now potentially being managed by a company run from outside of the UK. Curiously Global Security Trustees Ltd has no employees, no money in the bank other than £100 so who is paying for the management of LCF and who will be actually doing the management? There are 2 directors but what experience do they have running the business? What do you think of the news? Good or bad? Add your comments below Global Security Trustees Ltd Ownership Malta There is a new article in the Evening Standard about LCF that reiterates much of the information that I've posted here over the last 2 weeks and confirms what I've previously stated. It's reassuring that

With the action taken against London Capital & Finance it has highlighted that many people are unaware of the differences between a regulated and unregulated investment and the fundamental issues with unregulated products. Some companies selling unregulated investments such as mini bonds appear to deliberately use this lack of knowledge to suit their marketing and snare unwary savers into buying unsuitable products. London Capital & Finance were selling unregulated bonds that were listed alongside savings accounts on various comparison sites and many people had no knowledge that they were being sold an investment where they could lose all their money.  Regulated and Unregulated Investments - What's the Difference? Misleading adverts like the one above use the word " security " and a tick to give a sense of reassurance. This is meaningless as the investment is NOT FSCS protected and the FCA do not regulate the sale of this product but many people would n

So it's the moment of truth for London Capital & Finance. They've failed to publish their long overdue accounts for 2018 that were originally meant to be submitted to Companies House in Oct 2018. They previously used a loophole that they've found to enable them to delay this submission which means the accounts were due yesterday, 17th January 2019. Some people don't seem to believe some of the facts published about London Capital Finance but this is a matter of public record shown on Companies House . They have not filed their accounts as required - check this link to view details . If this is correct LCF are now in breach of the Companies Act reporting requirements and will be fined depending how late they file although with the FCA investigating them it may be the least of their worries If you have any questions about this or any other posts please a comment below this blog Will they or won't they? London Capital & Finance Accounts for 2018 La