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FCA bans director for misleading investors over Keydata SLS bonds

The FCA has banned Arnold Eber from working in financial services after he misled investors about the strength of bonds which backed Keydata products.

Eber was chief executive and director of CIB Partners between September 2007 and September 2010. CIB Partners acted as an adviser to SLS Capital, a Luxembourg-based investment vehicle which issued the underlying bonds behind Keydata.

The FCA says that in September 2007 Eber became aware that without continuous cash injections there was a high risk that the SLS portfolio would suffer severe liquidity issues within a year. He was also aware by August 2008 that SLS had sold off most of the asset portfolio that underpinned the SLS bonds.

Despite this knowledge, Eber issued a number of false and misleading documents about the strength of the SLS portfolio. He also failed to inform the former FSA of his concerns and to be truthful in all his dealings with the regulator.

The FCA says Eber acted with a lack of integrity and his failings were particu-larly serious because the documents were relied on by third parties as assurance that sufficient asset cover was in place for the SLS bonds.

CIB Partners was dissolved in April 2012.

Around 30,000 investors lost a total of £450m when Keydata collapsed in June 2009. Many have claimed from the Financial Services Compensation Scheme, which has separately sought to recoup money from advisers.

Yellowtail Financial Planning managing director Dennis Hall says: “This does not seem an adequate punishment for someone who contributed to investors being misled over Keydata bonds. Given that many investors have lost their savings, a fine as well as a ban would have been more appropriate.”

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