Individuals involved in a “Ponzi” scheme investment company which caused people to lose their life savings are liable to pay millions in damages, the High Court has ruled. London Capital & Finance (LCF) raised £237m from more than 11,600 investors by issuing mini-bonds before going into administration in 2019. Mini-bonds are an investment that typically offer high returns.
Previous court documents stated that the directors, including individuals from Surrey, used money to buy property, super cars, pay for luxury travel and make donations to the Conservative Party. Another court hearing could happen in December to decide how much compensation will be paid. The High Court of Justice in London concluded that it operated as a Ponzi scheme to pay old bondholders with new bondholder’s money between 2013 and May 2018.
Mr Justice Robert Miles concluded on Thursday that LCF misrepresented itself to the public in a “widespread, fundamental and systematic” way. People from across the country invested money into the mini-bonds, including from Sussex, Surrey and Kent. Ponzi schemes often advertise attractive rates of return for investors in order to lure in money, but returns are paid from money coming in from other, new investors.
This happens until the scheme ends up owing more than they hold in investments. The court found that former chief executive Michael Thomson and associate Spencer Golding were found liable on 14 November for breaches of duties as directors. Three othe.
