Collateral brothers sentenced to prison as FCA starts compensation proceedings
Collateral directors Andrew and Peter Currie have been sentenced to 2.5 years’ and 5.5 years’ imprisonment respectively for fraud and money laundering, following prosecution by the Financial Conduct Authority (FCA).
The City watchdog said it has embarked on confiscation proceedings to recover the brothers’ proceeds of crime, and compensation proceedings to recover investor funds.
However, it warned that almost two thirds of the outstanding loan book cannot be recovered.
The Currie brothers, who headed up the collapsed peer-to-peer lending platform, were convicted at Southwark Crown Court in May, at the end of a five-week trial. They were sentenced on 7 July.
Before its collapse into administration in February 2018, Collateral offered peer-to-peer style investments on a website fraudulently claiming it was authorised and regulated by the FCA.
After the fraud was uncovered by the FCA and Collateral was ordered to cease trading, the platform continued to receive investments and the Curries siphoned off client funds.
A new administrator appointed following the FCA’s intervention estimated that of the £17.9m outstanding loan book at the time of Collateral’s collapse, approximately £11m will not be recovered.
The FCA said this is because of significant shortfalls between the valuations applied to the property used as securities for the loans and the amounts the administrators have been able to realise on the market.
”Peter Currie fraudulently amended the register to entice investors in, and together with Andrew, stole client money once they knew the game was up,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA.
“Unfortunately, the investors will now be left to pick up the tab for the loans that have turned bad.
Read more: Collateral damage: A timeline of the administration
“The FCA has begun confiscation proceedings to recover the financial benefit obtained by the defendants, as well as compensation proceedings to recover investor funds. We welcome these significant sentences which show we will take every enforcement action at our disposal to pursue criminals and protect consumers.”
At the sentencing hearing, both defendants were also disqualified from being company directors.
In sentencing, His Honour Judge Griffith remarked in respect of Peter Currie that “Collateral was built on foundations of sand and dishonesty as a result of his fraudulent register change.”
In respect of Andrew Currie, Judge Griffith said “the clearest impression of your actions …. was to get more money out to the detriment of investors.”
