Victims of the London Capital & Finance (LCF) scandal have demanded Google pay back tens of millions of pounds that was spent on misleading digital advertising to promote the alleged “Ponzi scheme”.
The High Court heard last week that a marketing agency working on behalf of LCF paid Google more than £20m to promote its financial products.
Many of the 11,500 people who put money into LCF did so after discovering it through Google. LCF, which sold “mini-bonds” to investors, raised more than £237m before it collapsed in 2019.
But if 10% of the funds raised are spent on just one part of the marketing programme then imagine how high the internal rate of return has to be to privide a margin for investors.
Assuming it’s on the up and up in the first place of course.
Assuming it’s on the up and up in the first place of course.
Seems pretty clear that it wasn’t. Raised capital to lend to bullshit companies owned by the LCF directors. Loans went to Cape Verde property developers with no land, Dominican Republic property companies which only owned raw land and a racehorse owning firm which apparently had no bank account. Remarkably, these companies do not appear to be in a position to repay the money. 25% of the capital raised went on commission to the marketing agency.
The full details of the alleged conduct have not been made public, but she told the judge Mr Slinger had made “veiled threats that he could ruin my business, whilst at the same time talking to me inappositely about his personal life”.
Never talk to a woman inappositely.
Neil Woodford was just schit at picking stocks without supervision.
The lawsuit against Hargreaves Lansdown for promoting his Patient Capital Trust seems to have gone quiet.
This sounds like an attempt to find someone, anyone, who has money left to pay back suckers.
Has any newspaper ever been sued successfully because they carried an advertisement for what turned out to be a Ponzi scheme?
Frauds like this would not be possible without limited companies to hide the people involved.
Jim said:
“Frauds like this would not be possible without limited companies to hide the people involved.”
Jim, I know that’s one of your things, but it’s not relevant here.
Limited liability protects from bad luck and bad decisions, but not from fraud or wrongful trading (roughly where the company runs up debts that the directors knew or should have known it wouldn’t be able to pay).
in this case there already are criminal prosecutions going on against the directors, see here:
https://www.sfo.gov.uk/2023/05/17/sfo-secures-10-month-sentence-for-former-london-capital-finance-plc-ceo/
… and civil action to recover lost money from them, see here:
https://www.lawgazette.co.uk/news/civil-case-over-237m-collapse-of-london-capital-and-finance-opens-with-counsel-walking-out/5118801.article
“in this case there already are criminal prosecutions going on against the directors”
Ah right, £230m goes missing and someone gets 10 months, out in 5. A massive punishment.
Limited liability should be limited to one company per person. And should cost you a fair bit too. £50k at least. You want to start a business and limit your liability, fine, start a an LLC, pony up the money. And thats all you get. You don’t get to have hundreds of interlocking companies all doing shady deal with each other. Look at how Hunter Biden laundered all that Chinese money in the US – sham companies all over the place.
Limited liability should be restricted to people doing actual business, not financial shenanigans and outright fraud.
At which point would you determine fraudulent activity?
What M said… Why should Google be responsible for anything here? They’re just the ad-flingers, and have nothing to do with any of the shenanigans the company in question was up to.
And who in hell believes anything advertised on the internet, or *anywhere* in any medium?
Marketeers lie, sorry “present a positively redacted view”, as easily as they breathe, and it’s up to the punter to check on whether whatever is on offer is actually true or worthwhile.
If the punter doesn’t …. weelll…
Jim,
What am I missing here?
AIUI limited liability refers to shareholders who’s liability for debt is limited to the amount they’ve invested in shares. This seems reasonable as they don’t have a right to see the books are interfere in management.
In small companies shareholders are often directors, but Wiki tells me, and this is something I also understood from being in this position:
I can understand your frustration at these rules not being enforced and fraud charges not being brought, but the problems you rail against seem to be more about enforcement than the rules themselves.
“I can understand your frustration at these rules not being enforced and fraud charges not being brought, but the problems you rail against seem to be more about enforcement than the rules themselves.”
The rules are not enforced in anything other than the most egregious cases (such as this one) and even then the punishments are very lenient given the amounts involved. Nearly 100m is still unaccounted for, someone has it. It would be impossible to prosecute every case of misuse of LLCs without an enforcement agency that had stupendous resources (and considerable more powers) to make that happen. Just like its illegal to litter, 99% of littering offences go unpunished, so the law is pointless. You have to change something else to stop the activity happening. In this case it would be to make having an LLC expensive (it has a massive value to the person(s) utilising it so make them pay to get it) and make sure the company is actually trading. If it isn’t strike it off and confiscate the fee paid to start it. All LLCs have to send in their accounts, if those accounts didn’t show enough activity that could reasonably be determined to have generated a minimum wage (just as benefits claimants have to prove with their Universal Credit claims) then the company is declared dormant and gets struck off. That would keep LLCs for actual businesses not fraud and tax evasion.
BiND
Judging by Jim’s comments “Limited liability should be limited to one company per person. And should cost you a fair bit too. £50k at least.” he obviously wants to exclude less well off people from setting up companies so perhaps a bit of an elitist. I suspect at least 95% of my client companies would not have been able to start if that sort of funding was demanded.
It also shows Jim doesn’t really understand limited liability companies. Take one of my clients (who would of course never have been able to start as he did 20 years ago with virtually nothing in Jim’s world) .
My client ran two businesses in separate companies because they were two entirely different things. Live event organising and digital marketing. Both companies doing well, until Covid lockdowns brought the live event business crashing down. Costs already spent, money not coming in, and the business folded with huge debts, completely unavoidable. In Jim’s world this would also have brought the digital marketing business crashing down as if both were in the same company the assets of one business would have been fair game for the creditors of the other. But Jim could have muttered about ‘shenanigans’ to make himself feel better.
“he obviously wants to exclude less well off people from setting up companies so perhaps a bit of an elitist.”
No I want to keep chancers away from having limited liability. Its of considerable value to someone starting a business so why shouldn’t they have to pay for it?
” In Jim’s world this would also have brought the digital marketing business crashing down as if both were in the same company the assets of one business would have been fair game for the creditors of the other.”
As they should have been fair game. Mr X should not be able to rack up massive losses in Business 1 and walk away with all the assets in Business 2 untouched. They should all go into the pot to pay his creditors.
“Jim
All LLCs have to send in their accounts, if those accounts didn’t show enough activity that could reasonably be determined to have generated a minimum wage …then the company is declared dormant and gets struck off.”
Bit of a bugger for quite a few of my clients who are basically start ups, developing products or services that take years to make their first sales, never mind profitable. But, hey, who cares. Better to close down 99 genuine companies than take the risk there might be one fraudulent one.
You must be great fun at parties with such a bitter attitude.
“Take one of my clients (who would of course never have been able to start as he did 20 years ago with virtually nothing in Jim’s world) .”
Bollocks. Whats stopping him start as a sole trader until he’s got enough money to go to an LLC? Why do tuppenny ha’penny start-ups get the ability to have limited liability from day one? They should have to trade as sole traders for a while until they can afford LL, that would weed out the chancers and fraudsters.
“You must be great fun at parties with such a bitter attitude.”
I’ve seen too many people lose money to the sharp suited BMW driving LLC brigade to care what those sort of people think of me.
@Jim “Mr X should not be able to rack up massive losses in Business 1 and walk away with all the assets in Business 2 untouched.”
Yeah. Fuck the 22 people who worked for business 2. Including the 3 employees who had an equity stake in that business after working in it for a decade. They deserved to suffer. Everyone does.
And did you read about why business 1 went under? Lockdowns. Totally out of his control. He couldn’t pay his creditors because he wasn’t paid himself.
““You must be great fun at parties with such a bitter attitude.”
I’ve seen too many people lose money to the sharp suited BMW driving LLC brigade to care what those sort of people think of me.””
If you don’t like them, why are you at parties with them?
Oh, worked it out.
Someone has to serve the drinks
“If you don’t like them, why are you at parties with them?”
I’m not. All the people I socialise with are either employees or sole trader/partnership types. The sort of people who don’t think ‘I know I’ll start a business, but the first thing I’ll do is make sure that if I fuck it all up I don’t bear the consequences, someone else does’. They aren’t arseholes in other words.
Here’s a little example of what limited companies allow robbing bastards to do:
https://www.thescottishfarmer.co.uk/news/24183861.investor-fury-buffalo-farm-goes-administration/
I’m sure the people who are owed £1m+ while the owner of the business swans off into the sunset with all the assets will be very happy with the concept of limited liability…..
And here’s a comment in the thread about the above:
https://thefarmingforum.co.uk/index.php?threads/buffalo-farm-goes-bust.406495/page-3#post-9216933
But of course its very important for the economy that lying bastards should be able to stiff people left right and centre and get away with it, accountants say so.