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

Now failed LCF raised £237m from 11,600 retail investors

Sahar Nazir
clock • 2 min read

London Capital & Finance (LCF), a failed mini-bond issuer, operated as a Ponzi scheme, the High Court has ruled.

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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Professional Adviser journalist wins Headlinemoney award

Professional Adviser journalist wins Headlinemoney award

Prestigious awards celebrate financial services journalism excellence

Professional Adviser
clock 18 July 2025 • 1 min read
PA Digital Working Lunch: Baillie Gifford on the compelling UK opportunity

PA Digital Working Lunch: Baillie Gifford on the compelling UK opportunity

Join PA and Baillie Gifford online next Wednesday

Professional Adviser
clock 18 July 2025 • 1 min read
'Will this return us to one-size-fits-all?': Industry divided over Reeves' Consumer Duty wholesale review

'Will this return us to one-size-fits-all?': Industry divided over Reeves' Consumer Duty wholesale review

Wholesale exemption would ‘adversely affect the Duty’s objectives’

Sahar Nazir
clock 17 July 2025 • 5 min read