COVID-19- WE ARE  OPEN FOR BUSINESS AND HERE TO HELP
logo
NEED LEGAL ADVICE, CALL US NOW
0808-164-4106
EXISTING CLIENTS TEL 0808-169-5677

London Capital & Finance: Arrests Made Following Collapse of £236bn Firm

London Capital & Finance: Arrests Made Following Collapse of £236bn Firm

Four arrests have been made as part of a Serious Fraud Office investigation into investment company London Capital & Finance, which went into administration in January. The defunct firm is under investigation for mis-selling. Thousands of investors were drawn in by a £60m marketing campaign which promised secure ISAs with a high rate of interest. In fact, money was being loaned to small businesses at very high risk. Investors could see as little as 20% of their money returned.

The Financial Conduct Authority, or FCA, froze LCF’s accounts in December, following a marketing campaign which gave consumers the impression that they were investing in a Financial Conduct Authority-regulated ISA scheme. The money was instead invested in ‘mini-bonds'; high-risk loans to a very small number of small businesses. Several of these, in turn, loaned money to other businesses. Since the scheme was not an ISA, consumer investments will not attract the protections afforded by ISA status, making serious financial losses very likely.

Investors have also raised concerns about links between LCF and the businesses it loaned to, as well as between marketing firm Surge, which ran the £60m marketing scheme, and a price comparison website used to compare the ‘ISA’ favourably with those from high street banks. It seems likely that this scandal is only just beginning to unfold, but what is already clear is the huge human cost. Many victims have been left devastated and financially insecure by the loss of their savings to a scheme they were told was safe.

What is Mis-Selling?

In a nutshell, mis-selling is not giving someone the information they need to make an informed decision about buying a product, financial or otherwise. When discussing financial products, this information could be false, unsuitable to the client, or just inadequate, for example by leaving out the risks involved. LCF advertised its bonds as ISAs, which are a very different product with a much higher standard of protection. This is a clear case of mis-selling.

Is Mis-Selling a Criminal Offence?

It can certainly lead to a conviction. Mis-selling is not a named offence in itself, but it could create or be part of a case against you. Most obviously mis-selling could be classed as fraud by misrepresentation under the Fraud Act 2006, but this is a fluid area with a lot of overlaps and prosecutors are often strategic in their charging choices. If you are worried, the best thing to do is get in touch with a qualified criminal defence solicitor today, like those at Wilford Smith.

Contact our Fraud Defence Solicitors London, Sheffield and Manchester

Our Fraud Defence Lawyers are based in London, Sheffield and Manchester and advise and represent clients throughout England and Wales. Contact us today on 0808 168 5813 or complete our online enquiry form to find out how we can help.

Latest News Posts

As trusted employment law advisors to a wide range of small, medium, large, and multinational businesses, we can think of […]

According to new research published in the Financial Times, the number of employment tribunal cases in the UK whereby inappropriate […]

You have probably never heard of Hegestratos.  It appears he was a simple sea merchant, living around 300BC in Greece.  […]

1 2 3 24

SIGN UP FOR OUR LATEST UPDATES

Sign up for our monthly newsletters for the latest news & articles
At Wilford Smith we are invested in your success. Our team will get to know you, your family, your business, and your market sector. To us, you and needs are unique. You can be confident that by instructing us, we will take care of all your legal matters throughout your lifetime, providing creative solutions and protecting your best interests.

CONTACT  US

SHEFFIELD

  • Meadowhall Business Park
  • S9 2EQ
  • Tel: 0808 164 4106
  • Fax: 0844 225 0572

ROTHERHAM

  • Smithy House 22 Westgate,
  • Rotherham S60 1AP
  • Tel: 0808 164 4106
  • Fax: 0844 225 0572

LONDON

  • 20 Old Bailey
  • LondonEC4M 7AN
  • By appointment only
Copyright ©2022 Wilford Smith, All rights reserved.
2022 Wilford Smith is the trading name of WS Strategic Ltd. a limited company registered in England and Wales, registration number 07777022. Registered office – Meadowhall Business Park, Sheffield S9 2EQ. We are authorised and regulated by the Solicitors Regulation Authority. SRA Registration Number 640898.