London Capital & Finance’s former chief executive Michael Thompson has received a 10-month suspended sentence after his breach of a restraint order imposed on his bank account.
The sentence, which is suspended for two years, was secured by the Serious Fraud Office today (May 17) at Southwark Crown Court.
As part of an investigation into suspected fraud and money laundering at LCF, the SFO had frozen Thompson’s bank account.
The SFO uncovered that Thompson hid £95,000 after the restraint order was imposed on him.
According to the SFO, this included £40,000 from a tax rebate and a fraudulent insurance claim worth £55,000 for repair work to a barn that was never completed.
The sums were paid into an account owned by Thomson’s wife, in an attempt to hide the money from the SFO.
SFO investigators found Thompson sent part of this money to “further conceal and hamper its recovery”.
This included the purchase of a £5,000 holiday in Italy, a £3,900 horse saddle, £1,170 on a hotel and spa stay in Torquay, and £5,495 on a hot tub.
The SFO’s director Lisa Osofsky said the sentence makes clear that company executives are not above the law.
“When they break it, we have the means and the resolve to go after their money, no matter where they hide it.
“Over the past two years we have traced and seized every asset we have gone after, recovering over £140mn for taxpayers.”
LCF collapse
LCF collapsed in 2019 owing more than £230mn, putting the funds of some 14,000 bondholders at risk.
The FCA’s handling of the collapse was branded “one of the largest conduct regulatory failures in decades” by the Treasury committee, which urged the FCA to implement a change in culture to protect consumers and financial markets.
A report by Dame Elizabeth Gloster published in December 2020 found the FCA had shown "significant gaps and weaknesses" in its policies and practices ahead of LCF's collapse.
Last year, the FSCS said it had paid compensation on 99 per cent of bonds impacted by the collapse of LCF.
jane.matthews@ft.com
