Millionaire becomes fifth arrest in case of failed bond firm LCF

The millionaire whose sophisticated marketing firm put thousands of investors’ savings into collapsed bond firm London Capital & Finance has been arrested, the Evening Standard has learned.

The Serious Fraud Office arrested Paul Careless at his home near Brighton yesterday and questioned him for four-and-a-half hours at Worthing police station. SFO officers took large amounts of documentation, sources said.

Careless’s company, Surge Financial, was paid tens of millions of pounds by LCF for marketing and customer services, carrying out sophisticated online sales techniques through social media. A total of 11,600 people invested £267 million in LCF before it collapsed into administration early this year.

Confirming the arrest, a spokesperson for Surge said: “Paul Careless has not been charged and he is not on bail.

“Surge was a third-party supplier of services used in relation to raising investment for LCF. It did not handle client money and had no involvement in the deployment of funds to borrowing companies.”

His is the fifth arrest in the ongoing investigation into LCF.

Sources close to Careless said LCF’s administrator Smith & Williamson was responsible for the arrest, suggesting the arrest was a tool to get him to hand over documents which, after legal advice, he had refused to give.

S&W sources strenuously denied being involved with the arrest in any way.