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Peer2Peer Finance News | September 19, 2019

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New concerns emerge about FCA regulation of Lendy

New concerns emerge about FCA regulation of Lendy
Marc Shoffman

LENDY investors have backed calls for an independent probe into the regulation of the peer-to-peer property lending platform prior to its collapse.

The latest administrator’s report on Lendy showed that the Financial Conduct Authority (FCA) had given full authorisation to the platform at the same time that it had raised concerns about its loans, but it has now emerged that there was also a compensation scheme in place.

A report in The Times claims the regulator ordered Lendy to set up a £1.9m compensation scheme for mis-sold loans in late 2017, before providing it with full authorisation in July 2018.

Former City minister Lord Myners has already called for an independent inquiry into the conduct of the regulator and the Lendy Action Group, which represents a number of Lendy investors, has said it is keen to discuss this further with him.

It comes after Peer2Peer Finance News revealed Lendy co-founder Liam Brooke has stepped down from a separate company he set up last year to provide wage advances.

Companies House documents show Brooke setup a firm called Copious Capital in July 2018 with Lendy chief operating officer Robert Kelly.

But records now show Brooke stepped down as a director at the beginning of July, a month after Lendy’s collapse.

Lendy’s administrator RSM revealed the state of the platform’s loanbook last week, showing that investors are likely to receive an average of 57p on the pound for development loans and 58p for every pound from bridging loans funded via the platform.