Victims of the London Capital & Finance (LCF) collapse want compensation from Google for facilitating what has been called a Ponzi scheme.
The Telegraph quoted Andrea Hall, a spokesperson for the LCF Bondholders Action Group, as stating that “Google provided the mechanism…Google allowed its search and ad networks to become a rat’s nest of fake comparison sites designed to confuse and or trick consumers".
Victims felt “felt ignored and let down by Google” and they “expect the millions to be repaid”, said Hall.
According to documents published by Mouse in the Court, claimants told the UK High Court that a marketing agency working on behalf of LCF paid Google over £20 million to advertise LCF.
Google or its parent company Alphabet are not listed as defendants in the case.
LCF, which went into administration in January 2019, sold so-called ‘mini-bonds’ to retail investors, promising high returns of around 8% per year.
Approximately 11,600 investors lost money from the scheme, with losses totalling around £237 million.
Investigations revealed that LCF had invested in a limited number of high-risk companies, many of which were connected to LCF's own executives.
The defendants’ counsel Ian Mayes KC quit the case in February after disclosing that his clients were unable to pay their legal fees.
Stephen Robins KC, representing the claimants, called LCF “a Ponzi scheme from the outset” that used “new investors’ monies to pay returns to existing investors”.
He told the court: “The assets which those borrowers have purported to charge in LCF's favour, which were said to be worth significantly more than the loans, were, in fact, valueless or were worth only a small fraction of the pretended value.
“As a consequence, the only way LCF could ever hope to repay existing bondholders was by attracting new bondholders.”