Investment firm London Capital & Finance was Ponzi scheme, court rules

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Judge Robert Miles says former chief Michael Thomson and four others knowingly participated in fraud

Investment firm London Capital & Finance was Ponzi scheme, court rulesReutersInvestment firm London Capital & Finance , whose failure in 2019 triggered one of Britain’s biggest retail investment scandals, operated as a Ponzi scheme, a London judge ruled on Thursday.

“In my judgment, the fact that ... there were some genuine underlying assets is not in any way inconsistent with the existence of a Ponzi scheme in the present case,” judge Robert MilesA lawyer for Thomson said his client was “surprised and disappointed” but would not be commenting further. Administrators are seeking more than £177.5m in damages over a scandal that sparked criminal and regulatory investigations and a damning independent inquiry into the Financial Conduct Authority’s supervision of the business. Former auditors and directors have also been fined.

Thomson had “wanted to take out as much money as possible”, was “recklessly indifferent” to bondholders, had lied, forged signatures and knowingly misled auditor PwC, the judge said.

 

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