According to the Keydata Victims website, several investors in Keydata secure income bonds 1,2 and 3 have received a rejection for compensation for their non-Isa investments on the basis that FSCS is unable to establish that the apparent misappropriation of the underlying assets results in any liability on Keydata’s part.
The FSCS insists it is dealing with claims on a case by case basis but is unable to confirm how many standalone non-Isa claims have been successful to date. It has paid approximately 3,000 Keydata claims and rejected approximately 130.
An FSCS spokeswoman says: “We have been able to conclude, on the basis of the evidence currently available to us, that Keydata breached contractual and other legal obligations owed by it giving rise to a claim for damages by most (if not all) Isa investors. Although we consider that it is possible that Keydata breached contractual and other legal obligations owed to non-ISA Investors, we cannot be sure on the evidence currently available to us that any such breaches caused a loss giving rise to a valid claim for damages.”
According to administrator PricewaterhouseCoopers, there are 4103 Isa investments in SLS Capital and 1973 non-Isa (direct) investments totalling £103m. It says there are 5,500 investors with one or more investments in SLS and has estimated direct investors to total around 1600.
AWD Chase de Vere senior manager Jason Walker has questioned the inconsistency of the FSCS’ approach to the claims.
He says: “The only claims that appear to have been successful are when the client has done both an Isa and directly but not just a direct investment.
“I struggle to understand how they have rejected the claims based on their reasoning. If you pay out on an Isa because it was marketed as an Isa and this was misleading as it turned out to be non-compliant and you pay out on Isas and direct investments based on the fact again it was marketed as an Isa you can further the argument on for people who invested directly. These people looked at the product, saw it was Isa-able and didn’t invest through an Isa but still felt that it was regulated and adhered to the necessary rules and was safe.”