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Operators of London Capital & Finance’s “Ponzi scheme” have been told they must pay £180 million to cover losses suffered by investors in one of Britain’s biggest financial scandals.
Spencer Golding, a businessman who had ‘ultimate control’ of the now defunct investment company, along with other defendants including former LCF chief executive Michael ‘Andy’ Thomson, were told on Friday that they are liable for a total of £ 180 million.
Another group of defendants, including former police officer Paul Careless, whose marketing efforts had attracted individual savers to LCF, were found liable for a total of £211 million for “dishonest assistance”.
At a hearing at the High Court in London on Friday, the judge in the case said he recognized it was “highly unlikely” that the defendants would in practice “be able to pay anything close to the amount he ordered amounts’, given the ‘economic conditions of the country’. parties”.
But administrators at LCF, which raised around £237m from almost 12,000 investors before its collapse in 2019, said they would push to recover as much as possible.
The hearing took place after Judge Miles ruled last month that the failed provider of so-called mini-bonds was a Ponzi scheme that misrepresented itself in a “widespread, fundamental and systematic” way.
LCF had promised high returns to investors, many of them elderly, by providing financing to small and medium-sized British businesses.
Mr Justice Miles said a “significant portion” of the money raised was embezzled and used to make payments to people associated with the company.
Part of the proceeds was spent on diamond earrings, horses and hunting rifles, among other things, the court previously heard.
Administrators had brought the civil case in an attempt to recover money on behalf of creditors, including the Financial Services Compensation Scheme, as well as from individuals who had invested particularly large sums and were not fully covered by the scheme.
Barry Coffey, partner at Mishcon de Reya, which represents the administrators, said on Friday: “We will now take steps to enforce the terms of the order and collect assets to comply with the judgment.”
He said the administrators are “pleased to have received this order now, after four and a half years of litigation.”
Lawyers acting for Thomson told the court on Friday that he was “clearly not the mastermind” of LCF and that he had not achieved nearly as much financial benefit as some other defendants.
Lawyers for Careless said he “did not know the full details of the asset misappropriation” and “was not himself involved in or fully aware of the handling of the funds raised by LCF after the money had been raised”.
Lawyers acting on Golding’s behalf have told the court it is “critical that he is given sufficient time” to enable him to comply with Golding’s demands. [his] obligations”.