|
|
Post by bracknellboy on Feb 4, 2020 19:26:19 GMT
To be fair to the administrators, they are very much caught between a rock and a hard place.
If they ignore the waterfall the creditors will challenge it, and if they honour it the investors will complain. What more can they do? But for example with the AML acitvities in whose interests were they acting then? ... Presumably their own interests. If they had any doubts about the efficacy/compliance of Lendy's historic checks with AML regulations, then no doubt they would feel bound to retrospectively go through AML checks before distributing any monies. Otherwise they are leaving themselves open to action for breach/non-compliance with the AML rules. Whether their actions or the way they went about those checks was appropriate or efficient is another matter; but in hindsight it would hardly be a surprise to anyone if Ly's AML checks were not out of the book of "industry best practice" i would think.
The fact that the "need" to do the AML checks would have racked up further "legitimate" fees would not have weighed heavily on their conscience. But I bet they can point to evidence which provides justification for having to do so.
|
|
|
|
Post by default on Feb 4, 2020 19:38:29 GMT
AML/KYC was done by RSM to protect them from allegations of facilitating money laundering.
This issue with the waterfall is just the same. A court judgement is being sought by RSM again to save them from liability.
The real issue here is not RSM. It is how these issues escaped the attention of the FCA. The fact is that the FCA is not fit for purpose because it both promotes the financial institutions and supposedly safeguards their customers. These two roles are clearly conflicted and in such circumstances it is always the financial institutions that are given priority, because that is where the FCA get their fees.
We might vaguely hope that some of this emerges from the court proceedings, however, I doubt it.
|
|
quidco
Member of DD Central
Posts: 295 
Likes: 361
|
Post by quidco on Feb 4, 2020 20:14:47 GMT
But for example with the AML acitvities in whose interests were they acting then? ... Presumably their own interests. If they had any doubts about the efficacy/compliance of Lendy's historic checks with AML regulations, then no doubt they would feel bound to retrospectively go through AML checks before distributing any monies. Otherwise they are leaving themselves open to action for breach/non-compliance with the AML rules. Whether their actions or the way they went about those checks was appropriate or efficient is another matter; but in hindsight it would hardly be a surprise to anyone if Ly's AML checks were not out of the book of "industry best practice" i would think.
The fact that the "need" to do the AML checks would have racked up further "legitimate" fees would not have weighed heavily on their conscience. But I bet they can point to evidence which provides justification for having to do so. Action from whom? They're in danger of action if they don't address platform mis-selling for sure.
|
|
one21
Member of DD Central
Posts: 398
Likes: 265
|
Post by one21 on Feb 4, 2020 21:03:50 GMT
I find it hard to believe that RSM have been advised that Lendy's Ts&Cs are not unfare and their administration is obliged to follow them. Even though Lenders have not agreed to them and finer details were kept hidden from them.
|
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Feb 4, 2020 21:10:02 GMT
To be fair to the administrators, they are very much caught between a rock and a hard place.
If they ignore the waterfall the creditors will challenge it, and if they honour it the investors will complain. What more can they do? But for example with the AML acitvities in whose interests were they acting then? So there is clearly a third way where they will take direction from regulators and Lendy clearly mis-sold the investments as investors were not notified of the risk to capital caused by the waterfall model. For example, on the investment page for each loan where was information about the impact defaults would have on the return of capital beyond cost of recovery? Not only was this waterfall not explained to investors, but the information given to investors explicitly contradicts it, stating unambiguously that for loans which pay "bonus interest", "This is paid in preference to Lendy's share of margins and fees." lendy.co.uk/bonus-accrual - this page is still the most up-to-date information about the "bonus interest", and it does not seem unreasonable for investors to have relied on it.
They have no business paying themselves any margin and fees for loans where we are still due bonus interest.
|
|
quidco
Member of DD Central
Posts: 295
Likes: 361
|
Post by quidco on Feb 4, 2020 21:30:58 GMT
RSM are going to end up being sued for considerable sums.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,335
Likes: 11,558
|
Post by ilmoro on Feb 5, 2020 0:43:50 GMT
I find it hard to believe that RSM have been advised that Lendy's Ts&Cs are not unfare and their administration is obliged to follow them. Even though Lenders have not agreed to them and finer details were kept hidden from them. They are not following the t&cs, that is why all sums due, 'secured liabilities,' rank equally as per the 'waterfall' in the security docs.
Your second point is one of the elements LAG will be addressing in the challenge I suspect.
|
|
one21
Member of DD Central
Posts: 398
Likes: 265
|
Post by one21 on Feb 5, 2020 11:37:42 GMT
I find it hard to believe that RSM have been advised that Lendy's Ts&Cs are not unfare and their administration is obliged to follow them. Even though Lenders have not agreed to them and finer details were kept hidden from them. They are not following the t&cs, that is why all sums due, 'secured liabilities,' rank equally as per the 'waterfall' in the security docs.
Your second point is one of the elements LAG will be addressing in the challenge I suspect.
My apologies - this is what I was referring to, if it weren’t for the challenge RSM would have paid out this ‘hidden’ default interest to Lendy in front of Lenders. The challenge is going to cost us dearly by way of RSMs fees in addition to the fund raise.
|
|
jonno
Member of DD Central
nil satis nisi optimum
Posts: 2,808
Likes: 3,242
|
Post by jonno on Feb 5, 2020 11:53:58 GMT
They are not following the t&cs, that is why all sums due, 'secured liabilities,' rank equally as per the 'waterfall' in the security docs.
Your second point is one of the elements LAG will be addressing in the challenge I suspect.
My apologies - this is what I was referring to, if it weren’t for the challenge RSM would have paid out this ‘hidden’ default interest to Lendy in front of Lenders. The challenge is going to cost us dearly by way of RSMs fees in addition to the fund raise. Really don't get your point. If we don't challenge we're going to lose up to £30m in the waterfall. Even RSM's legal fees will look like small beer in comparison.
|
|
one21
Member of DD Central
Posts: 398
Likes: 265
|
Post by one21 on Feb 5, 2020 12:31:53 GMT
My apologies - this is what I was referring to, if it weren’t for the challenge RSM would have paid out this ‘hidden’ default interest to Lendy in front of Lenders. The challenge is going to cost us dearly by way of RSMs fees in addition to the fund raise. Really don't get your point. If we don't challenge we're going to lose up to £30m in the waterfall. Even RSM's legal fees will look like small beer in comparison. Yes I agree its a no brainer not to challenge, but the original conversation was regarding RSMs legal advice to payout the default interest to Lendy (which was hidden in the Ts&Cs). We are having to pay to challenge this advice so was the advice wrong in the first place.
|
|
jonno
Member of DD Central
nil satis nisi optimum
Posts: 2,808
Likes: 3,242
|
Post by jonno on Feb 5, 2020 12:46:32 GMT
Really don't get your point. If we don't challenge we're going to lose up to £30m in the waterfall. Even RSM's legal fees will look like small beer in comparison. Yes I agree its a no brainer not to challenge, but the original conversation was regarding RSMs legal advice to payout the default interest to Lendy (which was hidden in the Ts&Cs). We are having to pay to challenge this advice so was the advice wrong in the first place. Counsel's opinion is just that......opinion. It is neither correct nor incorrect until it is tested, usually by a court. The fund raising is to allow that test to take place.
|
|
rocky1
Member of DD Central
Posts: 1,139
Likes: 1,963
|
Post by rocky1 on Feb 5, 2020 12:58:51 GMT
i reckon the courts wont take long to see this for what it really is and want to know what the hell the FCA,FOS were playing at letting these platforms play monopoly with thousands of lenders hard earned savings,ISAs and pension funds.then simply shut up shop waiting to reap in millions more from unfair T@Cs changes.
|
|
one21
Member of DD Central
Posts: 398
Likes: 265
|
Post by one21 on Feb 5, 2020 13:16:54 GMT
Yes I agree its a no brainer not to challenge, but the original conversation was regarding RSMs legal advice to payout the default interest to Lendy (which was hidden in the Ts&Cs). We are having to pay to challenge this advice so was the advice wrong in the first place. Counsel's opinion is just that......opinion. It is neither correct nor incorrect until it is tested, usually by a court. The fund raising is to allow that test to take place. Yes it all has to be tested, even though in many instances it is blatantly obvious - as Rocky stated its just monopoly money to them.
|
|
|
|
Post by captainconfident on Feb 5, 2020 14:05:08 GMT
The legal precedent and eventual outcome of this case is Jarndyce vs Jarndyce.
|
|
travolta
Member of DD Central
Posts: 1,506
Likes: 1,214
|
Post by travolta on Feb 5, 2020 14:24:26 GMT
The legal precedent and eventual outcome of this case is Jarndyce vs Jarndyce. Thats a very bleak outlook
|
|
