P2P investment directors sentenced to combined 8 years in prison

On Friday, Peter Currie was sentenced to five and a half years and Andrew Currie was sentenced to two and a half years for fraud and money laundering following prosecution by the FCA.

Peter Currie was convicted of two counts of fraud, one by false representation as to the register and one by abuse of position, and one count of money laundering.

Meanwhile Andrew Currie was convicted of one count of fraud by abuse of position, and one count of money laundering.

Collateral was built on foundations of sand and dishonestyHis Honour Judge Griffith

The FCA said that, before its collapse into administration in February 2018, Collateral offered peer-to-peer style investment on a website fraudulently claiming it was authorised and regulated by the FCA. 

In December 2015, Peter Currie swapped the details of a separate company he had agreed to sell - Regal Pawnbrokers Ltd - for the details of Collateral on the FCA’s public register.

Over the following 18 months, the company was advertised as authorised by the FCA to encourage people to invest in loans on the Collateral platform. 

In January 2018, the FCA informed Peter Currie it had uncovered the register change and ordered Collateral to cease unauthorised business.

But following this Collateral continued to receive investments and both Peter and Andrew Currie removed approximately £750,000 from Collateral client accounts.

At around the same time, the brothers failed to inform the FCA they had appointed an administrator as they were required to, and transferred £88,000 from Collateral funds.

The FCA successfully challenged the appointment of this administrator in court.

A new administrator was appointed following the FCA’s intervention estimate that, of the £17.9mn in customer loans outstanding at the time of Collateral’s collapse, approximately £11mn will not be recovered.

The FCA stated that this estimate was 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.

At the sentencing hearing, both defendants were also disqualified from being company directors and 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.”

FCA joint executive director of enforcement and market oversight Steve Smart said: “Peter Currie fraudulently amended the register to entice investors in, and together with Andrew, stole client money once they knew the game was up. 

“Unfortunately, the investors will now be left to pick up the tab for the loans that have turned bad." 

Smart detailed that the FCA has now 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,” he added.

tom.dunstan@ft.com