nick
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Post by nick on May 1, 2018 11:17:29 GMT
Thank you for an(other) excellent post nick . From a layman's view, the CASS rules don't stack up to much if desperate principals could mix monies and thereby obviate their efficacy in the last desperate throes of taking out their due business profits*. (*Could there be criminal sanctions for doing so even if the principals were deemed not to be running a regulated firm requiring CASS rules as the disincentive not to do so?) The rules are great if followed, but if their not due to incompetence, negligence or fraud it leaves clients/investors exposed. On the face of it, it seems that in this case a number laws have been broken - claiming to be authorised and regulated when not, and undertaking regulated business when not authorised come both come to mind and are both criminal offences which could be prosecuted and have maximum penalties of 6 months and 2 years imprisonment respectively. However, a lot will depend on the circumstances which are far from clear, although unless it found that there was a deliberate intention to break the rules a prosecution is unlikely. If gross negligence or incompetence has found to have occurred I would strongly support some sanction against the relevant individuals to act as a future deterrent and help ensure platforms appropriately determine their obligations and fulfil these.
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oik
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Post by oik on May 1, 2018 11:43:09 GMT
If the principals have taken client money it is theft regardless of whether Collateral was regulated or claimed to be so. I've no real idea of how the law defines "fraud", "deception", or "theft" but, as merely a simple man on the Clapham omnibus, for someone to obtain money by falsely claiming that "Collateral (UK) Limited is authorised and regulated by the Financial Conduct Authority (FCA)" when that claim was untrue, and to continue obtaining money when they had every reason to know that it was untrue, would seem to be a criminal act. If the law doesn't share that view then there would appear to be very little protection from mal-practice for unsophisticated investors.
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Post by beepbeepimajeep on May 2, 2018 5:33:55 GMT
For this, we should look at the 2006 fraud act found here www.legislation.gov.uk/ukpga/2006/35There are three types of fraud defined - fraud by false representation, fraud by failing to disclose information and fraud by abuse of position. Looking at the section which defines "fraud by false representation" (sometimes referred to as fraud by misrepresentation). Under "2" in the above link IMO there could be definitely a case to answer here if we end up losing money. It's just an opinion however, I am no expert. I also feel that way about a certain loan on a certain other platform. It is up to the FCA to decide if there is a criminal case to answer to. They are the prosecuting authority here I believe. www.fca.org.uk/about/enforcementNote this gem on that page!
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Post by beepbeepimajeep on May 2, 2018 5:40:11 GMT
It's quite subjective. I believe for example if collateral could show they had good reason to believe they were authorised then the claim would not have been "dishonest" (which it has to be to be fraudulent as described by the above act) although it was false.
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tx
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Post by tx on May 2, 2018 7:08:24 GMT
Thanks for the fraud definitions, and I see absolutely no honesty when lender’s payment to a platform in agreement to fund certain projects were drawn from as “profit” without any lender’s prior knowledge or agreement. It seems to fit one of the definition perfectly.
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blender
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Post by blender on May 2, 2018 7:45:33 GMT
Thanks for the fraud definitions, and I see absolutely no honesty when lender’s payment to a platform in agreement to fund certain projects were drawn from as “profit” without any lender’s prior knowledge or agreement. It seems to fit one of the definition perfectly. Things are not that simple. You might expect that if you had paid a deposit to a company for goods, and the company was made insolvent before the goods were delivered, then your deposit should be returned. But in fact you are just a creditor like anyone else. Sure we all know that is the default position, without any special form of client accounting. The forum is not in a position to make judgements of illegality, and it is a dangerous discussion, for the forum, which could prejudice the actual proceedings. This will all come out in due course.
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amanda373
Anyone downloaded the full transcript of the Court Session with the FCA. .?
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Post by amanda373 on May 2, 2018 7:55:48 GMT
I for one would appreciate that as much of this is a foreign language to me and it would be helpful to read others comments which may elucidate the information. Thanks to all for the very helpful info so far. Alarming though some of it has been!
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tx
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Post by tx on May 2, 2018 8:08:25 GMT
Thanks for the fraud definitions, and I see absolutely no honesty when lender’s payment to a platform in agreement to fund certain projects were drawn from as “profit” without any lender’s prior knowledge or agreement. It seems to fit one of the definition perfectly. Things are not that simple. You might expect that if you had paid a deposit to a company for goods, and the company was made insolvent before the goods were delivered, then your deposit should be returned. But in fact you are just a creditor like anyone else. Sure we all know that is the default position, without any special form of client accounting. The forum is not in a position to make judgements of illegality, and it is a dangerous discussion, for the forum, which could prejudice the actual proceedings. This will all come out in due course.
I am simply trying to think as a normal person with common knowledge, and if I pay for a goods and company become insolvent, at the very least, I would not expect my deposit is drawn away as “profit” before my goods is delivered. That feels a very normal way of thinking about honesty, leaving aside all the legality.
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blender
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Post by blender on May 2, 2018 8:36:09 GMT
I quite agree, tx, and my comment about allegations of illegality was really aimed at some other posts - I should have said. When it comes to this situation, honesty and integrity are junked in favour of what you can get away with, egged on by 'advisors'. My first p2p default, with FC, was with an online retailer of war games figures, who kept taking cash payments, often from children, long after it was clear that the goods would never be delivered. He did a pre-pack and popped up again with a similar business, having defaulted the loan and failed the creditors. FC pursued him through the guarantee and gained full payment at the door of the court - but I am sure those children never saw their money. Business is tough, and when things go wrong the moral compass is the first item to be bent or broken. Fortunately, I have never been tested in that way.
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tx
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Post by tx on May 2, 2018 10:21:29 GMT
I quite agree, tx, and my comment about allegations of illegality was really aimed at some other posts - I should have said. When it comes to this situation, honesty and integrity are junked in favour of what you can get away with, egged on by 'advisors'. My first p2p default, with FC, was with an online retailer of war games figures, who kept taking cash payments, often from children, long after it was clear that the goods would never be delivered. He did a pre-pack and popped up again with a similar business, having defaulted the loan and failed the creditors. FC pursued him through the guarantee and gained full payment at the door of the court - but I am sure those children never saw their money. Business is tough, and when things go wrong the moral compass is the first item to be bent or broken. Fortunately, I have never been tested in that way. I totally agree! Really hope BDO can shed some true colour on the situation soon.
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shimself
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Post by shimself on May 2, 2018 12:46:50 GMT
Thus the use of credit (not debit) cards and section 75. If you don't completely trust the vendor use a credit card. No use in this instance of course
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on May 2, 2018 14:22:59 GMT
I have never thought that transferring money to a P2P client account, specifying my investor number, was the same as paying money to a company. Surely those are still your funds and nobody would be entitled to take them for other purposes? I don't see how such deposits could ever be considered to belong to the operating business to be used in any way they want.
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TenKay
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Post by TenKay on May 2, 2018 16:46:49 GMT
I have never thought that transferring money to a P2P client account, specifying my investor number, was the same as paying money to a company. Surely those are still your funds and nobody would be entitled to take them for other purposes? I don't see how such deposits could ever be considered to belong to the operating business to be used in any way they want. i thought the operating costs were taken from the money they made servicing the loans, if thats the correct term
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archie
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Post by archie on May 2, 2018 17:08:24 GMT
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iren
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Post by iren on May 2, 2018 20:27:39 GMT
I have never thought that transferring money to a P2P client account, specifying my investor number, was the same as paying money to a company. Surely those are still your funds and nobody would be entitled to take them for other purposes? I don't see how such deposits could ever be considered to belong to the operating business to be used in any way they want. Yes, and let’s also remember that whether the business was correctly authorised is not relevant to whether client funds can be taken as “profits”. The business and directors are obliged to act in accordance with the law and regulatory requirements on the basis of the activity they are conducting. One breach of law/regulation cannot be an excuse for another.
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