1.UK – AltFi
FT Adviser reports more fallout from the LCF affair:
“More than a dozen MPs have called for Andrew Bailey to resign from his position as chief executive of the Financial Conduct Authority for his part in "presiding over the biggest financial scandal in recent years".
The calls have been made in relation to the collapse of mini-bond holder London Capital & Finance, which went into administration in January owing more than £230m and putting the funds of some 14,000 bondholders at risk.
As a provider of unregulated investments London Capital & Finance did not need to be authorised by the FCA to issue mini-bonds, but it was authorised to promote the mini-bonds which MPs claim enabled the company to "raise money from bondholders by marketing themselves as FCA-regulated in their promotional literature."
The Serious Fraud Office is investigating what has been described as "highly suspicious transactions" at London Capital & Finance, with four individuals associated with its collapse arrested in March and since released pending further investigation.”
2. UK – FinTech
The FCA has released a report on Crypto scams. AltFi News reports:
“Following a huge uptick in retail investors losing money via crypto assets and forex investment scams, the Financial Conduct Authority (FCA) has issued a warning to investors to be wary of bogus online trading platforms.
A report found a tripling of crypto scamming cases to 1,800 for the most recent tax year with victims losing over £27m in total in 2018/19. Each scammed out of £14,600 on average. The scams tend to be operated by fraudsters using social media promoting ‘get rich quick’ online trading platforms, often using fake celebrity endorsements and images of luxury items like expensive watches and cars. Consumers are persuaded to invest, often being led to believe that their first investment has successfully made a profit.
The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact.”
3. UK – P2P
Proposed changes to insolvency rules could affect the P2P sector, reports P2P Finance News:
“INSOLVENCY reforms that are set to bump HMRC up the creditor list could limit the appetite for lending among asset-backed lenders (ABL), a business advisory firm has warned.
Chancellor Philip Hammond announced in his 2018 Budget that HMRC would return to preferred creditor status in business insolvencies from April 2020 to ensure tax is collected.
The reforms put HMRC ahead of creditors that have a floating charge as security, which could include some peer-to-peer lenders.
Duff & Phelps claims this change could deplete the security available for lenders and make them less willing to provide finance.”
4. UK – Equity
Crowdfund Insider reports:
“Just one week after launching its latest equity crowdfunding campaign on Seedrs, UK-based peer-to-peer lending platform Assetz Capital has successfully secured its initial £1 million funding target and is now nearing £1.3 million. The funding round comes less than two years after Assetz Capital raised more than £2 million through its first Seedrs campaign.”
5. US – P2P
A press release from Ellie Mae:
“Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry, announced today that it has launched a new major release of Ellie Mae’s Encompass Digital Lending Platform™. The latest release will help lenders of all sizes originate more loans across a wider variety of loan types, capitalize on the growing HELOC demand, sell and deliver loans more efficiently, provide a better loan officer experience and leverage the power of data to make better decisions faster.”