West One settles fraud case
On 1st February 2013 bridging finance lender and defendant West One Loans agreed to settle the longstanding claim with Nick Clarke, owner of Salkeld Investments, after he brought a legal claim action against the lender for lending his £235,000 investment to a fraudster and failing to gain security for the loan.
Nick Clarke founder Salkeld Investments said:
“Salkeld Investments Limited and West One Loan Limited have reached an agreement dated 1 February 2013 whereby the parties have resolved the dispute between them to their mutual satisfaction.”
This case serves as a warning to current and future investors in bridging loan finance, as well as advisers responsible for recommending such investments.
Clarke is the founder of Salkeld Investments Limited and is an experienced entrepreneur with investments across property, internet, biotechnology and natural resources sectors. He was introduced to an investment opportunity with West One Loans by his accountant.
In April 2011, West One Loans offered Clarke the opportunity to participate in a secured loan which it was intending to advance to an individual claiming to be Massimo Barbini.
West One advanced £570,000 to Barbini, partly funded by £235,000 from Clarke. As security in respect of the loan, West One Loans would obtain a registered charge over the property in Fulham, London and had an open market valuation of £950,000.
The term of the loan was to be seven months and throughout this period, West One Loans would pay Clarke a net interest rate of 1 per cent per month on the sum that he had invested. West One would repay Clarke’s investment of £235,000 on or around 19 November 2011.
Clarke and West One Loans entered into a Trust Deed relating to the loan which stated that West One Loans had previously agreed that the loan would be secured by way of a registered charge over the Fulham property.
The contract contained the term that West One Loans would obtain valid security in respect of the loan, specifically in the form of a registered charge over the property.
It also stated that West One would not advance any part of the loan to the borrower before it had obtained valid security over the property and that, in the event that the borrower did not repay the loan, it would enforce the security over the property on behalf of Clarke (and any other investors involved in the loan).
West One Loans advanced the full amount of the loan to an individual who was not Barbini and who did not own, or have any interest in, the property and without having obtained any valid security over the property. When West One Loans tried to register a charge over the property it was refused by HM Land Registry on this basis.