SFO launches investigation into London Capital & Finance Plc

Maria Nikolova

The SFO urges those who have invested in London Capital & Finance Plc over the period 2016 to 2018 to contact the watchdog.

The saga around London Capital & Finance Plc continues… The UK Serious Fraud Office (SFO) announces the start of an investigation into individuals associated with the firm.

The SFO explains that, on March 4, 2019, four individuals were arrested in the Kent and Sussex areas. All four individuals have been released pending further investigation. The operation was coordinated with the assistance of the National Crime Agency, City of London Police, Kent Police, Sussex Police and the South East Regional Organised Crime Unit (SEROCU). This investigation was opened following a referral from the Financial Conduct Authority (FCA) to the National Economic Crime Centre (NECC).

The SFO encourages members of the public who have invested in this scheme over the period 2016 to 2018 to contact the watchdog through this reporting form.

Let’s recall that London Capital & Finance has entered into Administration.

Earlier in March, The UK Financial Services Compensation Scheme (FSCS) said that London Capital & Finance plc had issued its own mini-bonds to investors on a non-advised basis and that, given that this activity is not a regulated activity under the Regulated Activities Order. Hence, this activity not FSCS-protected. For this reason, while the firm is insolvent, the FSCS is not accepting claims against the firm.

However, if the FSCS determines that there are circumstances that give rise to potentially valid claims, it will begin to accept claims against London Capital & Finance plc.

Finbarr O’Connell, Adam Stephens, Colin Hardman and Henry Shinners (“the Administrators”) all of Smith & Williamson LLP, were appointed by the Court following an application to Court by the directors of the company.

Whilst the directors of London Capital & Finance made the application for the appointment of Administrators, the FCA consented to the appointment of the named Administrators. The Administrators were not approached directly by the company or its directors but rather by a third party who was aware of LCF’s need for independent insolvency advice.

LCF has entered into administration following action by the FCA. The regulator has determined that “the manner in which LCF was promoting its bonds was misleading, not fair and unclear”.

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