Ex-Director at LCF Hit with FCA Ban for Misleading Investors

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The
Financial Conduct Authority (FCA) has banned and fined Floris Jakobus Huisamen,
a former director at the now defunct London Capital & Finance plc (LCF),
for his role in approving misleading financial promotions that led to losses of
thousands of retail investors.

The FCA
issued a fine of £31,800 to Huisamen and banned him from working in
financial services over his “reckless” approval of LCF promotions
while head of compliance . Huisamen consented to a settlement , thus receiving a
30% reduction in his fine. Had this discount not been applied, the fine would
have amounted to £45,500.

The
promotions presented LCF mini-bonds as a far more attractive investment than
they actually were, failing to disclose risks like hidden fees and
unsustainable lending practices adequately.

Despite his
own concerns, Huisamen did not adequately scrutinize or challenge the claims in
the promotions, did not obtain evidence to support them, and allowed misleading
suggestions that the mini-bonds were FCA-regulated. He continued signing off on
inaccurate promotions even after becoming aware of problems.

FCA
Enforcement Director Therese Chambers stated that Huisamen’s approval process
became “an ineffective tick-box exercise” that misled investors into
losing money. The FCA said the failings warrant his exclusion from the
industry.

“Thousands
of investors were persuaded to invest on the basis of highly misleading
statements. It is right that he can no longer work in financial services,” Chambers
added.

Thousands Harmed and FCA’s
Censorship

The FCA
recently took disciplinary action against London Capital & Finance (LCF)
for its deceptive promotional activities, choosing not to levy a fine due to
the firm’s bankruptcy. These promotions misled numerous investors, including
those most at risk, into purchasing high-risk financial products. Furthermore,
the Serious Fraud Office has also initiated an investigation into LCF’s
collapse in 2019, which resulted in a staggering loss of £236 million for
investors.

In
addition, the UK’s Financial Services Compensation Scheme (FSCS) issued an
alert in August 2023
, cautioning against prolific scammers preying on LCF’s
victims. According to the FSCS, these con artists employ advanced methods to
ensnare their targets, including impersonating FSCS officials.

LCF had
marketed non-transferable unregulated debt securities, or “mini-bonds,”
investing the proceeds in various high-risk ventures, leading to its downfall
in 2019 and impacting over 12,000 investors with total losses amounting to £236
million. The FSCS took over the administration of LCF’s liquidation in November
2021.

The
compensation scheme for LCF victims was concluded by the FSCS on 31 October
2022, after significant delays and three years following the firm’s failure.
The FSCS has reported that it compensated 99.5% of eligible LCF customers,
distributing over £115 million in total. This payout followed an earlier appeal
by the FSCS to the relatives of deceased victims of LCF, underlining the
scheme’s broad and complex impact on affected families.

The
Financial Conduct Authority (FCA) has banned and fined Floris Jakobus Huisamen,
a former director at the now defunct London Capital & Finance plc (LCF),
for his role in approving misleading financial promotions that led to losses of
thousands of retail investors.

The FCA
issued a fine of £31,800 to Huisamen and banned him from working in
financial services over his “reckless” approval of LCF promotions
while head of compliance . Huisamen consented to a settlement , thus receiving a
30% reduction in his fine. Had this discount not been applied, the fine would
have amounted to £45,500.

The
promotions presented LCF mini-bonds as a far more attractive investment than
they actually were, failing to disclose risks like hidden fees and
unsustainable lending practices adequately.

Despite his
own concerns, Huisamen did not adequately scrutinize or challenge the claims in
the promotions, did not obtain evidence to support them, and allowed misleading
suggestions that the mini-bonds were FCA-regulated. He continued signing off on
inaccurate promotions even after becoming aware of problems.

FCA
Enforcement Director Therese Chambers stated that Huisamen’s approval process
became “an ineffective tick-box exercise” that misled investors into
losing money. The FCA said the failings warrant his exclusion from the
industry.

“Thousands
of investors were persuaded to invest on the basis of highly misleading
statements. It is right that he can no longer work in financial services,” Chambers
added.

Thousands Harmed and FCA’s
Censorship

The FCA
recently took disciplinary action against London Capital & Finance (LCF)
for its deceptive promotional activities, choosing not to levy a fine due to
the firm’s bankruptcy. These promotions misled numerous investors, including
those most at risk, into purchasing high-risk financial products. Furthermore,
the Serious Fraud Office has also initiated an investigation into LCF’s
collapse in 2019, which resulted in a staggering loss of £236 million for
investors.

In
addition, the UK’s Financial Services Compensation Scheme (FSCS) issued an
alert in August 2023
, cautioning against prolific scammers preying on LCF’s
victims. According to the FSCS, these con artists employ advanced methods to
ensnare their targets, including impersonating FSCS officials.

LCF had
marketed non-transferable unregulated debt securities, or “mini-bonds,”
investing the proceeds in various high-risk ventures, leading to its downfall
in 2019 and impacting over 12,000 investors with total losses amounting to £236
million. The FSCS took over the administration of LCF’s liquidation in November
2021.

The
compensation scheme for LCF victims was concluded by the FSCS on 31 October
2022, after significant delays and three years following the firm’s failure.
The FSCS has reported that it compensated 99.5% of eligible LCF customers,
distributing over £115 million in total. This payout followed an earlier appeal
by the FSCS to the relatives of deceased victims of LCF, underlining the
scheme’s broad and complex impact on affected families.



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