Collapsed London Capital and Finance operated ‘Ponzi’ scheme

The High Court of Justice in London concluded that it operated as a Ponzi scheme to pay old bondholders with new bondholder’s money between 2013 and May 2018.

Mr Justice Robert Miles concluded on Thursday that LCF misrepresented itself to the public in a “widespread, fundamental and systematic” way.

People from across the country invested money into the mini-bonds, including from Sussex, Surrey and Kent.

Ponzi schemes often advertise attractive rates of return for investors in order to lure in money, but returns are paid from money coming in from other, new investors.

This happens until the scheme ends up owing more than they hold in investments.

The court found that former chief executive Michael Thomson and associate Spencer Golding were found liable on 14 November for breaches of duties as directors.

Three other men – John Russell-Murphy, from Eastbourne, Paul Careless, who was chief executive of Brighton-based Surge Financial, and Robert Sedgwick all “dishonestly assisted” Mr Thomson and Mr Golding, the court heard.