Two investor groups set up for London Capital & Finance bondholders

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Two groups have been set up on Facebook for London Capital & Finance investors looking for information after the Financial Conduct Authority shut down the company pending an ongoing investigation.

The first, London Capital & Finance Bondholders, was set up on the 3rd January and is currently the larger of the groups with a couple of hundred members. The group is not allowing anyone other than investors to join and bondholders are only allowed to post if their posts are approved by a moderator.

The second, London Capital & Finance Action Group, has been set up to explore any avenues (legal or otherwise) investors can take to safeguard their funds. It was set up a couple of days ago and for that reason numbers just under 20 members at time of writing, but is growing rapidly.

I have been told that the larger Bondholders group has refused entry to anyone offering legal advice or other outside help (i.e. non-bondholders), which makes co-ordinating legal action practically impossible. The Action Group was therefore set up for investors who are not willing to simply watch and wait.

It should be noted that at this point it is unknown whether any investors have lost money, and London Capital & Finance’s limited communications to bondholders since the asset freeze have repeatedly stressed that none of its underlying loans have failed to pay money back to LCF.

Note however that “none of our borrowers have defaulted” is not the same thing as “we have enough money to pay all our investors back in full”. Even if all London Capital & Finance’s underlying loans are paid back in full, capital loss can still occur if the returns from these loans are not enough to cover London Capital & Finance’s costs (including the c. 20% fundraising costs disclosed in its last accounts) and the interest paid out already.

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16 thoughts on “Two investor groups set up for London Capital & Finance bondholders

  1. A lot of people seem to be hanging to the line from LCF “None of our loans have defaulted up to now” without understanding that it’s entirely possible for other things to be done to prevent default and ensure that the statement remains valid. Yet as you correctly point out the loans may still not be sufficient to repay investors. One loan was made at 9%, there is no way that can recover the commission fees and be able to pay investors/bondholders back their 8% interest

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  2. how do I join London Capital & Finance Action Group. I tried but it did not work.

    I am sick as I have my life savings invested in LCF

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  3. LCF is authorised by FCA since 2015, with FCA authorization NO. 722603, so why did it take FCA so long to take action putting so many investors hard earned money at risk?

    There is no doubt that LCF is responsible for not using correct words for promoting mini bonds? What are their Directors drawing the fat salaries for since 2012? These salaries are because of the money invested by us in LCF.

    At the same time FCA is equally responsible for failing to take appropriate action on time. I hold both LCF and FCA responsible for bad practice and MUST PAY OUR INITIAL INVESTMENT WITH FULL INTEREST IMMEDIATELY.

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  4. how do I join London Capital & Finance Action Group. I tried but it did not work.

    Make sure you answer the question that is asked when you apply to join. Otherwise you will be declined.

    LCF is authorised by FCA since 2015, with FCA authorization NO. 722603, so why did it take FCA so long to take action putting so many investors hard earned money at risk?

    This is actually early by FCA standards. Usually they wait for the scheme to collapse and default on payments before they intervene, and often not even then. Obviously it’s not early by any rational standards, including mine.

    At the same time FCA is equally responsible for failing to take appropriate action on time. I hold both LCF and FCA responsible for bad practice and MUST PAY OUR INITIAL INVESTMENT WITH FULL INTEREST IMMEDIATELY.

    LCF may well be required to do that but they have admitted they don’t have the money.

    The FCA doesn’t have the money either. The only money the FCA has is taxpayer’s money. For obvious reasons the taxpayer does not generally bail out investors in high risk unregulated investments (limited exemptions apply).

    I suggest rejoining the Action Group to stay updated.

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  5. LCF and FCA responsible for bad practice and MUST PAY OUR INITIAL INVESTMENT WITH FULL INTEREST IMMEDIATELY.

    Firstly I think you’re being a bit hopeful to expect investment and full interest immediately. Some bondholders had only just invested so would not have expected their capital back for nearly 3 years so suggesting it should be repaid immediately doesn’t make sense. Secondly I would be prepared to not get all your capital back let alone expecting all your interest too. LCF is insolvent so it doesn’t have the money to repay. We don’t yet know amounts involved and if there is fraudulent activity

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  6. I took a calculating risk buying bonds with LCF and I knew I would not be compensated if anything went wrong but took the gamble. I didn’t for a moment think that FCA would be the cause of myself and thousands of others potentially losing our investments. Were there no other options at all than for the FCA to step in all guns blazing. If wording about the bonds was misleading, couldn’t advertising have been temporarily withdrawn/amended?

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  7. I took a calculating risk buying bonds with LCF and I knew I would not be compensated if anything went wrong

    Then you were in a very small minority of LCF investors.

    I didn’t for a moment think that FCA would be the cause of myself and thousands of others potentially losing our investments.

    They weren’t. When a scheme like this collapses and you want to know who to blame, ask yourself: who has my money right now?

    In any case, if you were comfortable with the high risk of loss that is inherent in lending to small startups, does it particularly matter why they went under?

    Were there no other options at all than for the FCA to step in all guns blazing.

    Well there was Option Do Absolutely Sod All, which the FCA tried from late 2015 to the end of 2018, and look how that worked out.

    If wording about the bonds was misleading, couldn’t advertising have been temporarily withdrawn/amended?

    The misleading ads by themselves wouldn’t have led to the asset freeze. If that had been the sole issue it would have been resolved by fixing the ads and a fine. The asset freeze was because FCA considered there was a serious risk to investor capital – a problem that would have got worse and worse the longer the FCA took no action and the more LCF’s liabilities increased.

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  8. I have had many sleepless nights following misdemeanors of LCF I have invested my pension pot which I worked all my life for…also planned to have Hip Replacement at end of year with proceeds !!! I’m gutted. Where has the investments gone too ? I don’t understand why insolvency.

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  9. These scam… oops, schemes, are often too good to be true yet people still see these as viable. I’m not being funny, but look at what these ‘people’ are doing with the money. I’d love to see the directors in solitary for life but they’ll walk off into the du set with YOUR MONEY, laughing at you and moving onto the next set of mug…oops, investors.

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  10. Hi,
    I’m one of the distressed and angry investors in LC&F. Whilst I acknowledge there was an element of risk in this investment I am angry and very disappointed at the actions of LC&F (and others?) in what appears to be some fraudulent actions on the part of its directors.
    I have invested several thousand pounds in two Bonds and an ISA offering attractive returns of up to 8%, money taken from my retirement income, as the interest rates on offer by banks have been pathetically low.
    The FCA cannot be held blameless either – surely it should have nipped this in the bud earlier. Out of interest, the FCA has accumulated some £136M in fines this year to date (UBS being the latest business to be penalised at £26M) which goes straight to the Treasury – surely the Government can use some of this haul to assist with honest investors in LC&F who will lose out should the Administrators be unable to return our investments.!

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  11. Please send me website details how to join LCF action group. I tried several times but unable to do so.

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  12. I work for a firm called Hallbrook Partners Ltd.

    We currently represent a number of former LCF clients seeking recovery of their losses and have been instructed on the basis that in the event that the Administrator or the FSCS make a decision to return funds to clients without the need to identify and/or document the Firms negligence or a basis of claim against them, then as we would not be adding any value to the claim we will terminate our engagement without charge to them.

    We are still in the investigatory phase and would like to hear from other former clients of LCF to build our understanding of the Firms approach, their interaction with the marketing firm Surge Financial and the investment decision making process they underwent.

    We are also reviewing investor documentation issued by the firm, but unfortunately we do have some documentary gaps and hoped other LCF investors may be able to help. We still require copies of the Information Memorandum for the (ISA Series 1-4) along with copies of any marketing material that clients may have relied upon when deciding to invest with LCF.

    If you are able and willing to help, please visit contact me through our website

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  13. On verge of losing 30k ! Through 2 seperate investments a year apart. First year payments all came through ok- then disaster.

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