Last month, the UK Financial Conduct Authority (FCA) apologized for oversight "failings" that allowed investors to lose millions in the 2018 collapse of fraudulent peer-to-peer lender Collateral, as reported by the Financial Times.
In an email to over 300 complainants, the FCA admitted it was "too slow" to shut down the company after discovering wrongdoing. "We are sorry for the FCA's failings in relation to its dealings with Collateral and the distress and inconvenience this has undoubtedly caused you," it said, adding, "Losing any sum of money can be deeply upsetting and a cause of significant worry and frustration."
Collateral, set up in 2014 without proper regulatory approvals, fraudulently altered its status on the FCA register in 2015. The FCA discovered the fraud in November 2017 but delayed shutting down the lender until February 2018. The watchdog justified the delay by citing risks of a disorderly collapse harming investors. By then, Collateral had taken millions more from investors.
The FCA offered £700 in compensation to affected investors, acknowledging missed opportunities to act earlier. The Currie brothers, who ran Collateral, were jailed for fraud and money laundering in July 2023. About £11 million of the £17.9 million in customer loans outstanding at the time of Collateral's collapse remain unrecovered.
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