Key Facts
- •The Financial Conduct Authority (FCA) brought a claim against London Property Investments (UK) Limited (LPI), NPI Holdings Limited (NPI), Tony Stevens (TS), and Daniel Stevens (DS).
- •LPI provided services to individuals facing eviction, facilitating loans and/or selling their homes.
- •The FCA alleged contraventions of sections 19 and 21 of the Financial Services and Markets Act 2000 (FSMA).
- •Defendants' defence was struck out due to non-compliance with disclosure orders.
- •The trial focused on whether the alleged FSMA contraventions occurred and appropriate relief should be granted.
- •The FCA presented evidence related to 45 affected individuals.
- •LPI's activities included arranging regulated mortgage contracts (RMCs) and sale and rent-back agreements (SRAs).
Legal Principles
General Prohibition
FSMA, section 19
Financial Promotion Restrictions
FSMA, section 21
Regulated Mortgage Contracts (RMCs)
Financial Services and Markets Act 2000 (Regulated Activities) Order 2001/544 (RAO), Article 61
Sale and Rent-Back Agreements (SRAs)
RAO, Article 63J
Accessory Liability ('knowingly concerned')
FSMA, sections 380 and 382
Unenforceability of Agreements
FSMA, section 26
Remedial Orders
FSMA, section 380(2)
Outcomes
LPI and NPI contravened the 'general prohibition' in relation to RMCs and SRAs.
LPI systematically facilitated regulated loans and sales despite knowing the borrowers did not meet lending conditions. NPI engaged in SRAs, and both LPI and NPI acted 'by way of business'.
LPI contravened the 'financial promotion restrictions'.
LPI's website induced individuals to engage in investment activity by promising to help them keep their homes through loans, without properly disclosing the risks or regulatory requirements.
TS and DS were 'knowingly concerned' in the contraventions.
Both TS and DS were actively involved in LPI and NPI's operations and had knowledge of the unlawful activities.
Service Agreements and SRA transactions are unenforceable.
The agreements were made in contravention of the 'general prohibition' and it would be unjust and inequitable to enforce them.
Remedial order granted.
LPI must apply to remove restrictions placed on affected individuals' properties.
Injunction granted.
To prevent further contraventions of the 'general prohibition' and 'financial promotion restrictions'.