There have been many legal cases to follow in the area of peer-to-peer lending and more broadly in the area of leveraged investing.
In July, the Lendy Action Group won its cascading lawsuit against the directors of Lendy RSM, with the judge ruling that Model 2 investors would have priority in distribution payments.
Also over the summer, a landmark court ruling backed a restructuring plan for Amicus Finance, which raised a total of £15,368,280 from Crowdstacker investors between 2015 and 2017, before falling into administration in 2019 .
Additionally, in August, bondholders at London Capital & Finance withdrew their judicial review appeal against the Financial Services Compensation Scheme (FSCS) because they could not afford the £600,000 fee of the FSCS if they were to lose.
However, there are more ongoing legal actions in the sector.
Right here News Peer2Peer Finance lists ongoing court cases that have the potential to shape the future of P2P and the wider alternative finance community…
News Peer2Peer Finance understands that a new arrest has been made regarding Buy2Let Cars.
This follows the collapse of the companies behind car leasing provider Buy2Let Cars in March last year and the arrest of one person and the questioning of a second by police in April.
The arrests were part of a new fraud investigation into Raedex Consortium, the parent company of former lending platform Buy2Let Cars, and came after the Serious Fraud Office (SFO) launched an investigation into Raedex Consortium for having managed an unauthorized client investment program.
The SFO has launched an appeal to Buy2Let Cars investors to help them build their case by answering a questionnaire before January 31, 2022. The confidential questionnaire is accessible here.
On January 7, 2022, the city regulator filed criminal charges against Peter Currie and Andrew Currie, two former administrators of the collapsed P2P platform, with the brothers facing two charges under the Fraud Act 2006 and one charge under the Proceeds of Crime Act 2002.
It is alleged that the Currys 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 went out of business, the brothers allegedly abused their positions by transferring funds to a separate company.
The P2P pawnbroking and home lending platform collapsed into administration in February 2018 and went into liquidation in April 2019.
Last May, the administrators of FundingSecure, CG&Co, halted interim payments to investors after receiving a claim from a creditor over money in the client account under a legal term called a “quistclose trust”.
Then in November, CG&Co – which was appointed administrator 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 co-administrators said the suspension of payments to investors remained in place as long as the creditor’s lawyers continued to assert their client’s claim to the funds, and they had 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 administrators and claimants (including manager Liam Brooke) allowed changes ahead of a case management conference later this year.
Lendy and his co-administrators may amend their Amended Claim Form and Claim Details while the Defendants have had an opportunity to amend their written submissions.
Lendy went into administration in May 2019, leaving more than £160m of the loan portfolio unpaid, with at least £90m of those funds in default.
MoneyThing has a court hearing scheduled for February 17, 2022, after the lenders submitted witness statements in December.
The MoneyThing action group was created in October to represent investors on the platform who are concerned about the level of costs incurred in reducing the loan portfolio. Since then, the group has grown to over 300 members.
MoneyThing initially entered into a solvency liquidation at the end of 2019, but it was placed into administration in December 2020 after announcing that it could not afford to defend itself against future litigation from a borrower.