View more on these topics

Bondholders vote for Lifemark liquidation

Lifemark bondholders have triggered the liquidation process for the troubled life settlement vehicle behind Keydata, after voting in favour of a controlled liquidation.

Bondholders for 21 out of 25 of the Lifemark issues voted to begin the process to liquidate the Luxemburg-based Lifemark portfolio at a bondholder meeting in London last week. A meeting for bondholders of the remaining Lifemark issues has been adjourned until February 28.

Luxemburg regulator, the Commission de Surveillance du Secteur Financier, notified Lifemark on February 10 it would be withdrawing its licence as an investment vehicle.

The Financial Services Compensation Scheme has confirmed it provided a $10m loan to Lifemark in January through provisional administrator KPMG Luxemburg to prop up the portfolio, which has been suffering from a lack of liquidity.

The collapse of Keydata in June 2009 prompted an interim FSCS levy on the industry of £326m, with advisers paying £93m.

If liquidation had been avoided, the FSCS would have been more likely to recoup a higher amount of the compensation costs it has paid to Keydata investors.

The FSCS is taking legal action against Keydata distributors in a bid to recoup some of the costs it has paid out. It has offered a 50 per cent early settlement discount to firms with claims against them of less than £50,000.

It has so far accepted 5,200 claims and paid out £67m to Keydata investors who invested through another Luxemburg-based life settlement vehicle, SLS. Money Marketing understands the FSCS will look to pursue a much bigger amount from advisers who sold Keydata Lifemark products.

Lifemark provisional administrator KPMG Luxemburg declined to comment.

An FSCS spokesman declined to comment further.

Axxis Financial Planning director Owen Wintersgill says: “Regardless of what is happening with liquidation, the advisers who sold these products without understanding them should bear some responsibility.”

Recommended

1

FSA orders Threadneedle report following rogue trade – reports

The FSA has ordered Threadneedle to carry out a review of its systems and controls after a suspected rogue trade, according to reports. The Daily Telegraph says the FSA issued the asset manager with a Section 166 order after the group contacted the authorities about a trade it had blocked last year. A Section 166 […]

20

Money Advice Service defends A4e relationship

The Money Advice Service has defended its relationship with A4e, a contracting company which has hit the headlines after it was revealed the police are investigating fraud allegations at the firm. A4e delivers the MAS’ face-to-face advice service in England and Northern Ireland but MAS says the arrests and allegations are not in any way […]

Stand back for a view

I often use the term “too close to the coalface to see the coal”. We all love to be busy and often it is easy to get tied up in the trials of business production that you can forget to look forward to the layout. This year sees some unusual distractions that advisers will do […]

RJ adviser: More non-deal clauses would be tragedy

Raymond James adviser Tom Spain says it would be a “tragedy” if more adviser firms look to impose non-dealing contract clauses in light of Towry’s failed court case. Non-solicitation clauses prevent advisers who are leaving a firm from approaching clients, usually for a set period of time. Non-dealing clauses aim to stop advisers continuing to […]

Is three a crowd?

The pension versus Isa debate has raged on and off for years. Les Cameron, head of technical at Prudential, asks if three’s a crowd.   I think the debate was arguably settled by pensions freedom when the biggest downside of pensions – limited access and poor death benefits – was fundamentally changed. Total access, albeit with […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. This article appears to confirm my understanding that investors’ losses are down to the failure of LifeMark the provider as opposed to KeyData the intermediary, raising once again the question as to the basis on which the FSCS saw fit to hammer the intermediary sector for that £93m special levy. Can anybody explain this? Or was it yet another excuse for the FSA to rain down on the intermediary sector yet another salvo of financial carpet bombs ~ despite Hector Sants’ claim that the FSA has no prejudicial agenda against small IFA’s?

Leave a comment