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Ford wants Keydata probe ban over email breach

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Keydata Investment Services founder Stewart Ford has told a judge that the FSA should exclude from its investigation of the firm anyone who saw protected emails that were improperly obtained by the regulator.

According to Bloomberg, lawyers for Ford also called on the FSA to hand over communications with other agencies who have received the emails, such as the Serious Fraud Office, the Insolvency Service in the UK and financial watchdogs in both Luxemburg and the Cayman Islands.

The FSA placed Keydata into administration in June 2009. The regulator had been investigating the firm two years earlier to see whether it targeted investors with misleading advertisements as well as tax irregularities.

Speaking at a hearing in London yesterday, one of Ford’s lawyers, Hodge Malek said: “We want to know who at the FSA has seen the material. We say those people should be taken off the case.”

A ruling in October 2011 deemed that the FSA improperly obtained the emails sent by Ford and other directors to legal advisers as they were covered by the attorney client privilege. The review led to the FSA suspending its four-year investigation into the regulator.

Malek said the FSA’s dispersal of the e-mails to other regulators shows it was “hell-bent” to bring Ford down.

Malek said: “The FSA could have followed the correct and open path; instead they decided to take a risk because they thought the material was juicy and prejudicial and would help their case. They took a risk and they were wrong.”

In addition to banning the material being used for any purpose, Malek also wants copies of FSA letters informing other agencies about the judgment as well as any responses.

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Readers' comments (2)

  • In view of the fact that a court of law has determined that the FSA has acted illegally, it doesn't seem entirely unreasonable for Mr Ford to call for certain restrictions on how the investigation is pursued from this point on. I imagine he will have taken legal advice before submitting his request to the judge and it'll be up to the judge to decide whether or not to grant this request.

    Given the FSA's claim on its website to be "an open and transparent regulator", it shouldn't require a court order (assuming one is forthcoming) for it to live up to this claim ~ should it?

    Still, it does give one a certain sense of grim satisfaction finally to see the FSA hoisted on its own petard.

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  • I would ask the FSA to launch a full enquiry into how structured bonds are being marketed and sold particularly within banks, building societies and some larger IFA practices.

    Is interesting to note that the building societies are starting to offer Cash ISA linked to the FTSE with minimum rates of return. Just another form of structured bond but this time marketed as a Cash ISA. Our largest building society is actually offering this product to their clients with little or no guidance from qualified advisers. One of my own clients got caught in this trap when they wandered into this building society fairly recently and thought they were investing into a normal Cash ISA after asking for a better rate of return but emphasised that they wanted to invest in cash only, they would quickly offered a Cash ISA with a guaranteed rate of return of 11% and a fixed term of six years but were told that they could access to cash within interest penalty. It was interesting the clients haven't cottoned on that the interest rate on this ISA was in fact only 1.74% per annum which was less than their existing Cash ISA.

    As far as I'm concerned this product was misleading and surely should not be allowed under Isa rules as it has a link to the FTSE and is being marketed as a Cash Isa

    Needless to say that we are starting the complaints procedure on their behalf but has the banking industry not learnt anything about marketing these structured bond products. I am totally fed up of having to pay increased FSCS fees based on this marketing practice.

    Could the FSA please start doing their job soon and start checking that products are suited to the marketplace before they are sold.

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