Ongoing legal cases that could shape the future of P2P
There have been many legal cases to follow in the area of peer-to-peer lending and more broadly in the debt investment space.
In July, the Lendy Action Group won its cascading lawsuit against the directors of Lendy RSM, with the judge ruling Model 2 investors should be given priority in distribution payments.
Also over the summer, a landmark court ruling backed an Amicus Finance restructuring plan, which raised a total of £ 15,368,280 from Crowdstacker investors between 2015 and 2017, before falling under administration in 2019.
Additionally, in August, London Capital & Finance bondholders withdrew their legal review action against the Financial Services Compensation Scheme (FSCS) because they could not afford the £ 600,000 in legal fees. of the FSCS if they were to lose.
However, there are more lawsuits going on in the area.
Right here Peer2Peer Financial News lists pending legal cases that have the potential to shape the future of P2P and the wider alternative financial community …
Peer2Peer Financial News understands that another arrest has been made regarding Buy2Let Cars.
This follows the companies behind auto leasing provider Buy2Let Cars that fell under administration in March last year and one person was arrested and a second person questioned by police in April.
The arrests were part of a new fraud investigation into Raedex Consortium, the parent company of the former Buy2Let Cars lending platform, and came after the Serious Fraud Office (SFO) opened an investigation into the Raedex Consortium for having managed an unauthorized client investment program.
The OFS called on Buy2Let Cars investors to help them put together their case by answering a questionnaire by January 31, 2022. The confidential questionnaire can be accessed here.
On January 7, 2022, the city regulator initiated criminal proceedings against Peter Currie and Andrew Currie, two former directors of the collapsed P2P platform, the brothers facing two charges under the Fraud Act 2006 and one indictment. under the Proceeds of Crime Act 2002.
It is alleged that the Curries falsely told investors that they were regulated by the Financial Conduct Authority (FCA) to operate a P2P lending business. They were asked to cease all regulated activities in January 2018, but before the company ceased operations the brothers allegedly abused their positions by transferring funds to a separate company.
The P2P pawn shop and mortgage platform collapsed under administration in February 2018 and went into liquidation in April 2019.
Last May, the directors of FundingSecure CG & Co suspended interim payments to investors after receiving a claim from a creditor for money in the client account under a legal term called “quistclose loyalty”.
Then in November, CG & Co – who was appointed a director of FundingSecure in October 2019 following the platform’s collapse – said it had provided a significant amount of information at the request of the creditor’s lawyer.
The joint administrators said the suspension of investor payments remained in place while the creditor’s lawyers continued to assert their client’s claim over the funds, and he sought advice on the return of the investors’ funds.
According to Mouse in the yard blog, on October 28, 2021, the judge in a High Court case between Lendy’s administrators and the plaintiffs (including Director Liam Brooke) authorized changes ahead of a case management conference later this year.
Lendy and its joint administrators may change their amended claim form and claim details while the defendants have been given the opportunity to amend their written submissions.
Lendy took office in May 2019, leaving more than £ 160million overdue on the loan portfolio, with at least £ 90million of those funds in default.
MoneyThing has a court hearing scheduled for February 17, 2022, after lenders submitted witness statements in December.
The MoneyThing action group was formed in October to represent platform investors concerned about the level of costs incurred to reduce the loan portfolio. Since then, the group has more than 300 members.
MoneyThing initially entered a solvent liquidation at the end of 2019, but was put into administration in December 2020 after announcing it could not afford to defend itself against future litigation from a borrower.