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

 In further signs that the Coronavirus outbreak in the UK is still escalating the daily total on 20th December 2020 is the highest number ever recorded at 35,383 surpassing the previous peak on 2nd November of 31,518 daily positive cases diagnosed by a lab test. This is an increase of nearly 50% on the previous day's total. These numbers are still well below the likely numbers of infections from March 2020 but as testing capacity was very limited at the time the actual numbers reported were significantly below the suspected cases. It is suggested that at the time the cases were over 100,000 per day with around 5,000 actually confirmed by testing. To have the numbers increasing by such a large amount over a single day just before the Christmas period with substantially relaxed rules just seems to be a recipe for disaster. Hopefully many people will ignore what they CAN do and instead keep contact to a minimum to avoid passing on Covid19 to any vulnerable relatives. https://coronavir...

 The review by Dame Gloster into the failure of London Capital and Finance and the role of the FCA in the matter has been released. It makes for some pretty shocking reading and there are some incredible blunders and omissions by the FCA. It appears that they were warned on many occasions about LCF for different reasons but that these issues were not combined to give a "holistic" view of the company. Being unregulated for selling bonds meant that FCA seemed content to ignore it. Despite misleading information on their website and such adverts as below the FCA did very little to prevent consumers from being scammed. Repeated breaches of the information on the LCF website which seemed to be a game of cat and mouse with FCA telling LCF to amend, amendments being made, FCA saying all ok and then LCF reversing them again shortly afterwards. This was not a one off. Gloster Review of LCF/FCA Failure Released There are quite a few comments throughout the report. I can't give full...

The main borrower from London Capital & Finance was a company called London Oil and Gas which borrowed an eye watering £122 million from LCF - over half of the money that was collected from investors and certainly didn't tie in to the LCF claims of spreading lending across many companies. LCF went into administration in early 2019 and London Oil and Gas followed shortly afterwards. Aside from some very speculative or potentially dubious investments that London Oil and Gas made with their borrowed money the main asset remaining is in a company called Independent Oil & Gas (IOG) which is developing oil and gas fields and networks in the North Sea. IOG is a legitimate company that is listed on the London Stock Exchange and as a result the value of the investment in it can easily be calculated from the daily share price. There are 2 parts to the assets owned by London Oil & Gas in IOG. Parts of the loan were in exchange for shares and warrants in Independent Oil & Gas. ...

It's been a while since I did an overall update on the London Capital & Finance situation and there's been quite a lot happening in different areas. I'll try to summarise the main points under the different strands of action that have taken place 1) FSCS Compensation Some investors have started receiving their cheques from FSCS but due to the volume of claims this work is taking longer than anticipated. FSCS have stated that they are increasing the size of the team by 80% but it will not be completed by the original target date of 30 September 2020 and now not be complete before the end of December 2020. An additional 100,000 emails have been discovered and these are being examined to assist with the decision making process on cases. As of 27 August 2020 FSCS say they have paid out £20m in compensation to 1295 investors. Legal action to challenge the decision of the FSCS that LCF bonds were not regulated has been granted and is another route that may generate compensati...

A case has been heard at the High Court  that was brought against various parties allegedly involved in the London Capital & Finance bond fraud to prevent their assets being sold.  It was detailed in the court papers that orders have been placed on the assets of 5 people related to LCF that prevent any disposal of any assets worldwide that they own. This order was being disputed by the 5 defendants, Simon Hume Kendall, Michael Thomson, Elten Barker, Spencer Golding and Helen Hume Kendall. Curiously the Worldwide Freezing orders were only granted in August 2020, some 18 months after the collapse of London Capital & Finance although Serious Fraud Office Criminal Restraint Orders were in place in March 2019 but these are more limited in scope. Simon & Helen Hume Kendall Michael Thomson, CEO of LCF Spencer Golding on the right Elten Barker on right Interestingly the continuance of the Worldwide Freezing order was accepted by all the parties except Spencer Golding and E...

Yet another scam investment has gone bust losing investor's money. It's a sorry list of losses that in many cases had been highlighted on this blog over the years. Most recently it was Aston Darby car parking that was highlighted in 2018. Sadly the investors have found the reality of  "guaranteed returns" are nothing of the sort. It appears from the information released that it was a ponzi scam with new investor money being used to pay out existing ones. Even if the 22% guaranteed return was given to investors it means they'd lose the other 78% of their investment. Crossrail bond was offered with no connection to Crossrail itself. Blackmore Bond has gone into administration  Basset and Gold went into administration but this one looks like FSCS may pick up the tab for the losses Top ISA rates website promoted the range of dodgy mini bond investments Capital Bridge investments was disclosing 20% commission payments as per Blackmore Bond. It's reported that Capit...

The latest ONS (Office for National Statistics) data on UK deaths has been released today and paints a worrying picture about the increase in fatalities since the Coronavirus pandemic struck. As mentioned in my previous post these numbers lag the official daily Coronavirus deaths as they are based on registered deaths across the country not just those that happened in hospital. The numbers have shown a significant jump compared to the average for the last 5 years and for the first months of 2020. While the official UK numbers of Coronavirus deaths was reported as 14576 up to 17th April 2020 the numbers using the ONS data are significantly high, in fact they are almost double the numbers recorded. It's important to note that these can also include deaths where the person didn't get medical treatment for another condition but a large majority of these excess deaths are likely to be Covid-19 related. Using this ONS data it shows there were over 26,000 excess deaths compared...

Update 28 November 2024: Robert Sedgwick is among the defendants found to be liable for the collapse of London Capital and Finance after a trial lasting many months. The court found that LCF was a Ponzi scheme and Sedgewick was involved in the deception. He refused to give any evidence in the court case and the judge found this inferred negatively against him as a result. The judge found there were many areas where he was directly involved in actions to extract funds from LCF that resulted in the loss of bondholders money. Original article from 2019: There are a number of people who have been in the news over the £237 million failure of London Capital & Finance including the famous five who have been arrested by the Serious Fraud Office (SFO) investigating the collapse of the company. In addition to the main players there were a number of other people who helped the directors of London Capital Finance to carry out there activities. One of those was Robert Mannering Sedgwick from ...

It's taken almost a month from my previous post suggesting the administration for Blackmore Bond seemed to be inevitable and it's finally happened. Investors have not received their interest payments and now are looking at possible capital losses although the amount of recovery is yet to be determined. https://damn-lies-and-statistics.blogspot.com/2020/03/blackmore-bond-administration-inevitable.html Oak Trustees has appointed Duff & Phelps as administrators to manage the company and in their notice of doing so there are a couple of points for investors that are rather worrying. 1) Blackmore Bond have failed to be transparent with the trustees (no surprises there as Blackmore have still failed to file their 2019 accounts or to produce the accountant's report of the situation repeatedly promised) 2) It appears that Blackmore have taken out loans against properties in the last couple of months.   In the Trustee’s letter to Bondholders dated 16 April 2020 the Tru...

It's been suggested for some time that the official UK statistics for Covid-19 deaths are under reporting the actual number of fatalities because they only include the deaths happening in hospital where the patient has been tested positive for Coronavirus. Other numbers that may shed some light on the true mortality rate for Coronavirus in the UK have a time lag compared to the daily numbers published by Public Health England but the latest ONS (Office for National Statistics) weekly updates on deaths from all causes are due tomorrow (21st April) If they are anything like the numbers from last week they will show a massive jump in the number of UK deaths over this time period. It's important to note that this increase in deaths is compared to the average for the last 5 years and not all may be directly attributed to Covid-19. Some may be as an indirect result such as patients not getting treatment for other conditions or may not have been officially recorded as Covid becaus...

There is a huge amount of info out there about the spread of Corona Virus / Covid-18 across the world. Who would have imagined that in less than 2 months it went from something that was a curiosity in a small part of China to being a worldwide issue with a large proportion of the population under lockdown to prevent spread. There are some particularly good sources of information that I've found about the virus statistics. In terms of raw data and numbers the Worldometer site has constantly updated information. It's updates so frequently I think the "yesterday" tab tends to be better as you are looking at data that is now static and doesn't constantly change. https://www.worldometers.info/coronavirus/ As well as the headline numbers it also drills down into country by country details showing infection rates which can be useful to work out how a country is managing the pandemic. Coronavirus Covid-19 Latest Statistics As well as the raw data there are some...

Basset & Gold was a company featured on this blog last year warning of the risks that weren't adequately being explained in my view and this was highlighted in my review of Basset & Gold ISA . As of today it has been placed in administration as per the message below on their website. According to the FAQ section on the B&G website there were around 1800 bondholders that invested a total of £36 million in B&G, giving an average of around £20,000 per investor although this is likely to mask bondholders that invested much higher or lower amounts when the minimum was £1000. I doubt people investing in their bonds were fully aware of the risks to their capital that they were taking. According to the FAQ the administrators expect many bondholders to be covered by the FSCS so hopefully the return of capital will be higher than for other mini bond companies that have gone bust where investors have received from nothing up to 25%. If this is the case and FSCS has prote...

It's been revealed that 2 of the companies that have used money from Blackmore Bond have now gone into administration. Blackmore Bond is structured as a company borrowing from bondholder and lending money to many other Blackmore SPV (Special Purpose Vehicle) companies that are each supposedly developing different property sites around the UK. It's important to note that the SPVs are not independent and are mainly run by the same directors as Blackmore Bond itself. The two SPVs that have gone into receivership are Blackmore SPV 13 Ltd and SPV14 Ltd that are meant to be developing land in Birmingham and Liverpool. Reports suggest that little has happened with the development but that is unconfirmed. According to the paperwork submitted to Companies House, the Receivers were appointed by the lender to these companies called KSEYE Capital Limited Blackmore SPV 13 Ltd https://beta.companieshouse.gov.uk/company/10855805 According to the accounts filed up to 30 December 2...

Has Blackmore Bond been given a get out of jail free card? At the daily Government press conference on 28th March 2020 it was announced that the rules relating to insolvency and business failures were being relaxed to help support businesses through the Coronavirus pandemic. While this is clearly welcome to help protect jobs and assist companies through the current financial storms as a result of the surge of infections it also looks like it could mean Blackmore Bond can use it to further delay their payments to investors and continue to avoid any process that involves the company going into administration. Blackmore Bond Saved By Government? https://www.itv.com/news/2020-03-28/coronavirus-business-help-insolvency-alok-sharma/ Probably the aspect of most concern for investors in Blackmore Bond is the temporary suspension of wrongful trading provisions for company directors to remove the threat of personal liability which is backdated to 1st March 2020. There is no further...

The government advice is that you should be at least 2 metres away from other people at all times, something that has been called social distancing. But why is this needed? It's not very obvious when you are inside or in warm weather but every time you breathe your lungs are giving out water vapour which can contain the Coronavirus that causes Covid-19. The one time that it is visually really clear that you are breathing out water vapour is in the colder weather when you see a cloud in front of your face. This is what could be breathed in by someone else and is why you should be at least 2 metres away from other people so any possible transmission is reduced. Have a look how far the water vapour cloud moves from your mouth - it's quite a long way but over 2 metres it drops and by then the virus will have reached the ground. The reason the distance matters is that the vapour spreads out according to the inverse square law so if you double the distance the amount halve...

The government has plans for national emergencies and one of those is pandemic flu. For different emergencies there are plans drawn up about the process of handling the response. These plans are routinely tested with exercises to check readiness. However it's not much use if the tests for the plans are ignored and not acted upon. The foreword of the Flu Pandemic plan from the government reads: The prospect of a flu pandemic is one of the highest risks faced by the UK. Ensuring the country is fully prepared and able to respond quickly and effectively is a top priority for PHE and, of course, for the government. In addition the document also states: Given the uncertainty and the potential impact of influenza pandemic, pandemic influenza has been classified by the Cabinet Office as the number one threat to the UK population.  It's quite incredible that this risk has been identified as the number one threat to the UK population yet the current outbreak still has so many i...

The UK government changed tack this week and dramatically took measures that will massively impact the lives of the population. The paper produced by Imperial College seems to have been critical to this decision and there are some scary details in it. The final paragraph sums up in this way: A minimum policy for effective suppression is therefore population-wide social distancing combined with home isolation of cases and school and university closure.  The graph below shows the deaths over time with a peak in June. For the UK it predicts 510,000 deaths if no action is taken.  Interestingly it doesn't account for other deaths due to lack of health service capacity so there will be more on top of this where critically ill patients cannot get an intensive care bed say if they've had a heart attack or car crash. Another quote from the report: For an uncontrolled epidemic, we predict critical care bed capacity would be exceeded as early as the second week in Ap...

I can't really add anything to this but it's a very good paper on the numbers around Covid-19 https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca I've now done a blog about this

The administrators of LCF have issued their six monthly update on their progress . It's a lengthy document running to 50 pages so I thought it might be worth giving a summary of their findings and my thoughts on them so that bondholders have an idea of the key points made. As always with my blog these are my takeaways from the document, feel free to read it in full yourself if you want to confirm the details. The administrators have given an outline of their costs so far and the total they expect by January 2021. This total comes in at £7.2 million which is slightly lower than their previous estimate. It sounds a lot and obviously is but there is a huge amount of work to track down assets in a company that has apparently deliberately tried to disguise the destination of money received from bondholders. It seems clear from this report that the Administrators comments in February 2019 that the value of loans matched bondholder funds and assets in place were very wide of the ma...

The current status of Blackmore Bonds in a few facts. All put together it doesn't paint a very healthy picture of the company. Blackmore Bond raised over £25 million from investors Many of their developments have seen no work take place and are still building sites. 20% of investor funds were passed to Surge Financial at the point investors handed over money 60% of the GDV (Gross development value) was borrowed from banks for most sites. Bondholders rank after bank lenders in the case of insolvency Accounts for 2018 are overdue and Blackmore have broken the law by not providing them Accounts also overdue for Blackmore SPV development companies  Independent Chairman of Blackmore Bond, Kenneth Buzz West has left the Blackmore Interest payments delayed for August due to "bank issues" Interest payments failed to be paid for October 2019 and January 2020 There are only 12 development sites believed to be owned by Blackmore Annual payments from Blackmore Bond to B...