The former boss of the collapsed investment firm London Capital & Finance (LC&F), Michael Thomson, has been sentenced to six months in prison for contempt of court. He admitted to breaching a restraining order by selling luxury items such as horse saddles and a hot tub.
Court Ruling and Sentences
Judge Milne characterized Thomson's actions as an attack on the administration of justice. Thomson was sentenced alongside his wife, Debbie, who also admitted to the offences. Her six-month sentence was suspended for two years.
The couple had previously admitted to recklessly breaching a Serious Fraud Office (SFO) restraint order by receiving a £2,000 holiday refund and selling items with a combined value of almost £5,800.
Previous Breaches and SFO Investigation
At the time of the offences, Thomson was already serving a suspended sentence for an earlier breach, having transferred £95,000 to his wife to conceal funds from investigators, according to the SFO. The assets are subject to restraint proceedings as part of an ongoing SFO investigation into suspected fraud and money laundering at LC&F.
Collapse of London Capital & Finance
LC&F collapsed in 2019 after selling £236 million of mini-bonds, which promised returns to investors of up to 8% annually. However, little of the money went into safe interest-bearing investments. Instead, it funded speculative property developments, oil exploration in the Faroe Islands, and even a helicopter bought for a company controlled by LC&F. An additional £58 million was paid in commission to a Brighton-based marketing company that promoted the bonds.
Compensation and Impact
In 2021, the government announced a one-off compensation scheme for victims to supplement the existing Financial Services Compensation Scheme (FSCS). As of February 2024, the FSCS had paid out more than £173 million, with £58 million from the scheme's usual industry funding and a further £115 million from the government top-up. To date, SFO investigators have stated that the Thomsons' actions have resulted in the dissipation of more than £100,000 in assets.
Paul Napper, the SFO's head of proceeds of crime, said: “We continue to advance our inquiry into LC&F on behalf of the thousands of investors who lost everything through its abrupt collapse.”
