Financial watchdog apologises to investors for failures over fraudulent investment firm

The Financial Conduct Authority (FCA) has called for people who may have invested in fraudulent North West peer-to-peer firm, Collateral, to come forward to the regulator so they can receive an apology and compensation.

Collateral offered peer-to-peer style investments. Its directors were able to fraudulently change details about the firms’ public entry on the FCA’s interim permission register.

This change made it look like the firm held interim permission from the FCA to undertake consumer credit activities, which were granted to firms who transferred from the Office of Fair Trade (OFT) to the FCA in 2014, when it did not.

The firm applied for full authorisation in March 2016.

Opportunities were missed, during this process, to identify that the firm did not hold a valid interim permission and that the interim permission register was incorrect. Once the FCA had knowledge of the issues, it said it did not act promptly enough to tell the firm to stop regulated business and to correct the register.

Following an investigation, the FCA prosecuted the directors, who were sentenced to a total of eight years imprisonment for their role in the fraud in July 2023.

Peter Currie and Andrew Currie were sentenced to five-and-a-half years and two-and-a-half years, respectively, in jail on July 14, 2023, for fraud and money laundering following prosecution by the FCA.

The FCA has received more than 300 complaints from investors about failures when dealing with the firm.

These include a failure to maintain the correct information on the register and a failure to alert investors when the regulator became aware of the incorrect information.

The FCA said it has upheld these complaints, has apologised to complainants, and will make payments of £500 to those who invested in Collateral in recognition of the contribution to the distress and inconvenience caused by the FCA’s errors.

Further payments of £150 will be made for delays in complaints handling.

The payments are in line with the FCA’s complaints scheme and reflect the nature of the failures by the FCA.

The FCA said it is aware that there may be other Collateral investors who have not complained.

The regulator has set up a dedicated complaint form for these people to provide their details, and has called on them to do so before March 31, 2025.

Stephen Braviner Roman, General Counsel and Executive Director of Legal, Risk, Compliance and Corporate Governance said: “While the fraudulent actions of Mr and Mr Currie were the cause of Collateral investors’ losses, we recognise we could have acted faster. For that we apologise.”