Collateral administrators Andrew and Peter Currie have been sentenced to 2.5 years’ and 5.5 years’ imprisonment respectively for fraud and cash laundering, following prosecution by the Monetary Conduct Authority (FCA).
The Metropolis watchdog mentioned it has launched into confiscation proceedings to get better the brothers’ proceeds of crime, and compensation proceedings to get better investor funds.
Nevertheless, it warned that just about two thirds of the excellent mortgage e book can’t be recovered.
The Currie brothers, who headed up the collapsed peer-to-peer lending platform, have been convicted at Southwark Crown Courtroom in Might, on the finish of a five-week trial. They have been sentenced on 7 July.
Earlier than its collapse into administration in February 2018, Collateral supplied peer-to-peer type investments on a web site fraudulently claiming it was authorised and controlled by the FCA.
After the fraud was uncovered by the FCA and Collateral was ordered to stop buying and selling, the platform continued to obtain investments and the Curries siphoned off shopper funds.
A brand new administrator appointed following the FCA’s intervention estimated that of the £17.9m excellent mortgage e book on the time of Collateral’s collapse, roughly £11m won’t be recovered.
The FCA mentioned that is due to important shortfalls between the valuations utilized to the property used as securities for the loans and the quantities the directors have been in a position to realise in the marketplace.
”Peter Currie fraudulently amended the register to entice buyers in, and along with Andrew, stole shopper cash as soon as they knew the sport was up,” mentioned Steve Good, joint govt director of enforcement and market oversight on the FCA.
“Sadly, the buyers will now be left to select up the tab for the loans which have turned unhealthy.
Learn extra: Collateral harm: A timeline of the administration
“The FCA has begun confiscation proceedings to get better the monetary profit obtained by the defendants, in addition to compensation proceedings to get better investor funds. We welcome these important sentences which present we are going to take each enforcement motion at our disposal to pursue criminals and defend shoppers.”
On the sentencing listening to, each defendants have been additionally disqualified from being firm administrators.
In sentencing, His Honour Choose Griffith remarked in respect of Peter Currie that “Collateral was constructed on foundations of sand and dishonesty on account of his fraudulent register change.”
In respect of Andrew Currie, Choose Griffith mentioned “the clearest impression of your actions …. was to get more cash out to the detriment of buyers.”