Stewart Ford secures FSA judicial review over Keydata
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Source: VisMedia
Keydata founder Stewart Ford has been granted a judicial review into the way the FSA has carried out its investigation into the firm, Money Marketing can reveal.
Ford (pictured) applied for the judicial review in March. The review was granted in March, and since then both Ford and the FSA have been making submissions to the Royal Courts of Justice in London to finalise what the judicial review will examine.
The FSA first began investigating Keydata in December 2007, and says its investigation into Keydata is at an advanced stage.
Ford says: “I can confirm that I have applied to the High Court for a judicial review of certain aspects of the FSA’s investigation into Keydata and my role at the company. After preliminary consideration of the issues that I have raised and the FSA’s response to those issues, the court has given me permission for the review.
“I made this application because of my serious concern about the way in which the FSA has conducted its investigation into Keydata, and I believe the FSA should be held publicly accountable for its illegal conduct.”
He adds that as the matter is before the court he cannot comment further on the details of the case.
The hearing is due to take place in July.
The FSA has confirmed that Ford has launched a judicial review against the regulator, but says it cannot comment on further details.
Keydata was put into administration in June 2009 and PricewaterhouseCoopers was appointed as administrators, after it was decided it could not pay a HMRC tax bill relating to products that had not been listed correctly to receive Isa status.
In November 2009 the Financial Services Compensation Scheme declared Keydata was in default, meaning it would not be able to pay claims against it.
Claims relating to Keydata have triggered FSCS levies for 2010/11 of £326m, with advisers having to pay £93m and fund managers £233m.Claiming relating to SLS Capital made up the majority of an £80m FSCS levy for 2009/10.
Norwich & Peterborough Building Society was fined £1.4m by the FSA last month for the way it sold Keydata products, and agreed to pay £51m in compensation. Out of that £51m, £28m will be paid back to the FSCS to cover compensation payments the scheme has already made to N&P Keydata customers.
Earlier this month the Serious Fraud Office dropped its investigation into Keydata, launched in July 2009, citing insufficient evidence to secure a prosecution over more than £100m worth of assets which disappeared from Keydata products invested in Luxembourg based vehicle SLS Capital.
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Readers' comments (7)
Evan Owen | 13 May 2011 12:41 pm
What is needed is a fully independent review, a judicial review is such a limp wristed option, like a dead kipper.
Might as well review everything the FSA has, or hasn't done since 2001. Come to think of it I don't think we have enough time!!
The system won't allow the regulator to be shown up for what it is so we are wasting our breath, might as well find something useful to do.
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hugh Jeego | 13 May 2011 12:42 pm
In this digitally superior world I cannot believe 1.) that the SFO cannot track down £100,000,000, suggest they speak to Mrs Thatcher about sequestration. 2.) The FSA cannot differentiate between an intermediary and a product provider and finally that Price Waterhouse Cooper can charge so much for their involvement in this debacle. P.S. PWC`s bill is not in yet but I am sure it will be massive, keep your eyes peeled!
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Simon Mansell | 13 May 2011 1:57 pm
FSA should be held publicly accountable for its illegal conduct!
Yes I agree there should be no place in a common law democracy for an unelected, unaccountable, quasi jusdicial, quango. However, FSMA have made its actions legal! The FSMA 2000 was bad law but it remains law and I fear all a JR will do is find that the FSA acted within its powers, rather than questions those powers.
In 1999 when at the bill stage the advice given by Lord Lester of Herne Hill QC and Monica Carss-Frisk about FSMA was as follows:
In our view, the Principles are so widely and vaguely drafted, that the conviction of a person of a disciplinary offence on the basis of an alleged breach of a Principle, where the conduct in question does not fall within a rule, evidential provision or guidance, would amount to a breach of the requirement of legal certainty in Article 7 of the ECHR.
Many lawyers have agreed.
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Norman Flight | 13 May 2011 3:56 pm
EVAN
It does not have to be that way, if the questions asked are the right ones and the answers, hopefully, are the truth, then some justice will be seen to be done. At the very least the FSA should be held to account over their handling of the whole affair.
I hope that someone brings up the SFA's distasteful allegiance to PwC at the hearing. There are a great many un-answered questions about that relationship I would love to hear. To say that a judicial review has no powers or bearing in British law is just cinicism gone mad. Needless to say the SFA will wheel out the big guns and we, the taxpayer, will have to pay for it . . . more levy?
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Jim Gillespie | 14 May 2011 10:44 am
Sadly Evan is right.
You can't challenge the government or any of it's "quango's". Like Evan, i've been there, done it and got the T shirt.
The only winners with these actions are the lawyers.....
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Anonymous | 15 May 2011 9:11 am
The FSA has proven itself to be incompetent on almost every front over the past decade. Will it be held accountable for the bank of Ireland/Post Office mess where the UK tax payer is likely to have to pick up another multi-million pound bill because of the regulator's ineptitude ? No !
It is truly frightening that this unelected, unaccountable quango continues to survive and expand despite its truly horrendous track record.
And the staff get paid bonuses.
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Julian Stevens | 15 May 2011 12:40 pm
If nothing else, at least the FSA can't wave aside the requirements of a Judicial Review. Whether or not it's able to convince the court that it acted properly and competently within the parameters of the FSMA 2000 will be the crunch point. Doubtless the FSA will spend however many millions of pounds of levy payers' money are required to engage the very best lawyers our money can buy without a moment of doubt or hesitation.
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