07-10-2018, 08:43 AM
(07-10-2018, 12:07 AM)CoolingDude Wrote: Good to know that they have this covered - from their F&Qs
Quote:What happens if we stop trading or become insolvent?
Naturally we have no intention of doing so. However, if BridgeCrowd were to become insolvent we have ring-fenced your investment.
Social Money Holdings Ltd is a non-trading vehicle that holds the loan agreements and mortgages with the borrowers in a trust on behalf of you, the investors. Should BridgeCrowd stop trading or become insolvent, then your investments and the loans are ring fenced from the BridgeCrowd insolvency. Your loans would then be managed by the solicitors on trust (rather than BridgeCrowd) until all loans are redeemed and the loan book is closed.
Okay - some Sunday DD for those who want to carry out (if not, I will reveal all tomorrow night... but what else is there to do on a Sunday... stop being lazy and do some bleeding work!). Your task for a quiet Sunday is to research the above and come back with your findings
I believe the company that operates the Bridge Crowd "platform" is Social Money Limited not Social Money Holdings Limited going by the identity of the directors of each company. The word platform is in inverted commas because if it was such the company would be carrying on a regulated activity and the answer would be radically different.
Mr Alexander, who is a Scottish qualified barrister so not qualified to appear in English courts, produced a lengthy justification and posted it on the Independent Forum, I believe, some time ago as to why Bridge Crowd did not require FCA regulation. I did not read that justification in full mainly because it seemed he wrote it as much to convince himself of the conclusion he already held not as an unbiased legal opinion. That aside if he is correct then the wind down procedure as described above will take place in the event of the insolvency and subject to the performance of each loan and costs not being above the amount provided lenders will receive their entitlement in full as trust monies.
On the other hand if the company is carrying out a regulated activity, as I say I don't know whether it is or not, then if it becomes insolvent, or even if it does not, the "relevant authority" in his case for the time being the FCA, has the power under the Financial Services and Markets Act (FSMA) to apply to the court to appoint Administrators. The FSMA make the company's terms and conditions null and void.
The relevance of Mr Alexander's qualification is Social Money Limited is an English registered company so the action, if any, will take place in an English court and he will be unable to represent the company as counsel, although he will be able to give evidence.
If the court finds in the FCA's favour the legal position will be the same as Collateral, a mess.
The opinions and observations that I display on this forum are personal and do not necessarily concur with the proprietors of the forum. I represent no platform or other organisation in my postings and my remarks should not be taken as advice. I accept no responsibility or liability for the accuracy, content, completeness, legality, reliability of the information contained in my posts. Or for people acting or refraining to act upon them.