Committee publication · Correspondence · 15 January 2025

Letter from Stephen Braviner Roman, General Counsel, FCA, relating to the collapse of Collateral UK, dated 19 December 2024

Inquiry: Work of the Financial Conduct Authority

Summary

The FCA's General Counsel writes to the Treasury Committee Chair regarding investor complaints about the collapse of Collateral (UK) Ltd, a fraudulent peer-to-peer lending firm. The FCA apologises for failures to detect the fraud earlier, identifies specific gaps in its oversight (inadequate Companies House checks, slow correction of fraudulent register entries), and announces £500 ex-gratia compensation per complainant plus additional payments for complaint-handling delays. The letter outlines regulatory safeguards implemented since 2020.

Key findings

Collateral directors Peter and Andrew Currie perpetrated fraud via fraudulent IP Register amendment in November 2015, falsely transferring interim permission from Regal Pawnbrokers to Collateral; Peter Currie convicted May 2023 (two fraud counts, money laundering), Andrew Currie one fraud count and money laundering, both sentenced July 2023.
FCA identifies two regulatory failures: failure to check Companies House records against application materials from April 2016 onwards would have exposed the fraudulent name change; six-day delay (23–29 January 2018) in correcting the IP Register after identifying the incorrect information.
FCA offering £500 per-complainant ex-gratia payment (£173,000 total to date) plus £150 for complaint-handling delays and £50 for late-2023/2024 communication failures; inviting non-complainant investors to come forward.
IP Register decommissioned July 2020; new Financial Services Register now includes Companies House cross-referencing, stricter data-change controls, and dedicated Firm and Individuals Team to monitor data quality.
FCA acknowledges interim permission regime decision allowing firms to self-amend trading names on IP Register was exploited illegally, though characterises the risk-balancing approach as reasonable at the time given 27,000→50,000 firm expansion.

Tone

Factual

Topics

financial-regulationconsumer-protectionfraudregulatory-oversight

Key actors

Stephen Braviner Roman, Dame Meg Hillier MP, Peter Currie, Andrew Currie, Financial Conduct Authority (FCA), Collateral (UK) Ltd, Regal Pawnbrokers Ltd, BDO LLP

Notable line

“While the fraud perpetuated by Collateral's directors, Peter and Andrew Currie, is the direct cause of investors' losses, we could and should have acted sooner to identify concerns or act in response to them.”

Key Quotes

“While the fraud perpetuated by Collateral's directors, Peter and Andrew Currie, is the direct cause of investors' losses, we could and should have acted sooner to identify concerns or act in response to them.”
— Stephen Braviner Roman · Acknowledging FCA responsibility for regulatory failures contributing to investor distress

“We should have checked Companies House which would have identified that Collateral could not have held Interim Permission.”
— Stephen Braviner Roman · Identifying first regulatory failure in oversight of Collateral's authorisation application

“We decided on 23 January 2018 to correct the IP Register and did not action this decision until 29 January”
— Stephen Braviner Roman · Identifying second regulatory failure: six-day delay in correcting fraudulent register entry after discovery

“The circumstances that led to the crystallisation of the issues in Collateral cannot be repeated. The functionality that was abused by Peter Currie was unique to the IP Register, which was decommissioned in July 2020 …”
— Stephen Braviner Roman · Explaining systemic changes eliminating the specific vulnerability exploited in the fraud

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Source · parliament.uk record ↗