Britain’s financial regulator, the FCA, is to pay investors in failed peer-to-peer lender Collateral £500 in compensation for its failure to correct the impression that the firm had interim authorisation.
In a statement, the FCA said it has also apologised to around 300 complainants about the Collateral collapse, while further payments of £150 will be made for delays in complaints handling.
Collateral offered peer-to-peer style investments, said the regulator, with its directors able fraudulently to 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 OFT to the FCA in 2014, when it did not.”
Opportunities were missed during its application process to identify that the firm did not hold a valid interim permission and that the interim permission register was incorrect, the FCA admitted
“Once the FCA had knowledge of the issues, it did not act promptly enough to tell the firm to stop regulated business and to correct the register,” said the statement.
Following an investigation, the FCA prosecuted the Collateral directors who received eight-year jail sentences in July 2023 for their role in the fraud.
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.”