London Capital & Finance operated as Ponzi scheme, High Court rules

Between 2013 and 2018, LCF raised £237m from 11,600 retail investors, claiming to lend the funds to UK SMEs after rigorous due diligence. Instead, much of the money was funnelled to connected companies in the London Group, led by former LCF director Michael Thomson and associates. Bondholders were misled about these connections and the payment of 25% commissions to sales agent Surge Financial. The Court concluded that LCF relied on funds from new investors to pay existing bondholders, effectively operating as a Ponzi scheme. Over £136m was misappropriated, with £75m routed through fra...