The auditors who signed off the accounts for the failed peer-to-peer investment firm Lendy have been hit with a £180k penalty after intervention by the Institute of Chartered Accountants for England and Wales, the mouseinthecourt can exclusively report.
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Reporting by Daniel Cloake
Regular readers of this site will be aware of our ongoing coverage of the High Court claim brought on behalf of the Joint Administrators’ of Lendy Ltd.
Lendy collapsed in 2019 and was in the business of facilitating crowdfunded investments purportedly secured against property.
The claimant in that case asserts that negligence by auditors Moore Stephens LLP, now known as MSR Partners LLP, were the cause of some £15m losses to the retail consumers of Lendy. The claims are denied and have yet to be tested in court.
Despite that multi-million pound claim progressing through the courts it has now emerged that in the last few weeks the Institute of Chartered Accountants for England and Wales (ICAEW) have separately concluded disciplinary proceedings against MSR Partners LLP and the individual auditor who signed off the accounts.
A so-called settlement order, published February 7th 2025, shows that the auditors admitted preparing financial statements which were “non compliant“; failed to audit “in accordance with International Standard on Auditing“; and failed to “obtain sufficient appropriate audit evidence” among other things.
It is said these failures applied to unqualified audit opinion’s for the years ending 31st December 2016 and 31st December 2017, dated 14th February 2018 and 3rd August 2018 respectively.
The order recorded that MSR Partners LLP, having taken legal advice from Clyde & Co LLP, “admits the Formal Allegations (in full)” and agreed to “pay a fine in the sum of £157,875” and pay “costs in the sum of £13,000” within 35 days.
Settlement Chair Alan Nelson, sitting with legal advisor Andrew Granville Stafford, decided that “The Respondent firm shall be Severely Reprimanded“.
It wasn’t just the firm that was subject to action by the ICAEW – the individual auditor who signed off the documents received a fine too.
Ms Kelly Amanda Sheppard FCA, of Gravesend, Kent, was found to have committed the same breaches as detailed above and was “therefore liable to disciplinary action“.
Hit with a fine of £10k, she was also ordered to contribute towards the £13,000 of costs payable by MSR Partners.
The order records that Ms Sheppard agreed to undertake 40 hours of professional development work and to submit six “file reviews” to the ICAEW over the next two years. She too “shall be Severely Reprimanded“.
This development was helpfully brought to our attention by The Audit Directory who were happy to be named as our source.
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