Ex-London Capital & Finance boss handed 10-month suspended jail sentence
By Kirstin Ridley
LONDON (Reuters) - The former boss of collapsed investment firm London Capital & Finance (LCF), which left about 11,000 investors facing 237 million pounds ($300 million) in losses, has been spared jail after breaching a court order freezing his assets.
A judge at London's Southwark Crown Court sentenced Michael Thomson to 10-months in jail, suspended for two years, after the former CEO admitted a 95,000 pound spending spree on luxuries such as an Italian holiday, a hot tub, hotels and a saddle, the UK Serious Fraud Office (SFO) said.
Thomson's assets were frozen as part of an SFO investigation into suspected fraud and money laundering at LCF, but Thomson concealed 95,000 pounds he received after the order was imposed - money the SFO said could have been used to compensate victims.
The SFO has not charged Thomson or anyone else with any wrongdoing related to LCF's collapse and its investigation continues. The legal firm representing Thomson did not immediately respond to a request for comment.
LCF's 2019 collapse wiped out investors in a mini-bond scheme, prompting a government bailout and Britain's Financial Conduct Authority (FCA) to propose tougher protections for retail customers against mis-selling.
The SFO has briefly arrested five people and called three others in for interviews. One is no longer a suspect, its website showed.
"Today's result makes clear: 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," SFO director Lisa Osofsky said in a statement.
LCF was regulated by the FCA, which was rebuked by lawmakers in 2021 for appearing unable to meet accountability standards on firms it oversees in what they called "one of the largest conduct regulatory failures of the last three decades".
The government stepped in with compensation because the mini-bonds, sold as low risk, high return investments, were unregulated, leaving bondholders not eligible for compensation under the Financial Services Compensation Scheme (FSCS).
($1 = 0.7923 pounds)
(Reporting by Kirstin Ridley; Editing by Mark Potter)