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FCA fines IFA £20k over Keydata advice


The FCA has fined an IFA firm £20,000 over unsuitable advice to invest in Keydata products.

The regulator found that clients of John Joseph Financial Services invested a total of £6.1m in Keydata products between August 2005 and June 2006.

The FCA says the firm failed to adequately diversify clients’ portfolios and failed to disclose the associated risks of this.

The regulator says John Joseph Financial Services also failed to disclose the material risks of investing in Keydata, and in some cases did not disclose the risks at all.

Many of the clients were approaching or in retirement so found it difficult to rebuild their investment portfolios.

The firm was also found to have weak systems and controls, which the FCA says affected fact finding, advising, disclosure of risks, and recording and monitoring of sales.

Since Keydata’s collapse, John Joseph Financial Services has helped clients obtain redress and tried to secure ex gratia payments for clients from the firm’s professional indemnity insurers.

The firm has also set up a group to bring legal action in the US to recover assets for Keydata investors, which is funded at the company’s expense.



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There are 7 comments at the moment, we would love to hear your opinion too.

  1. I wonder whether this advice would have been suitable if Keydata had not collapsed.

    Why did Keydata collapse? Because the FSA failed to do its job properly.

    Why is the FCA now pursuing IFA’s that recommended Keydata? Because they are easy targets and it proves that the FSA was not at fault meaning that someone else picks up the tab.

    Will this fine be used to reduce our FSCS levy? No, because although none of us has been caught we’re all scum doing the same sort of dodgy dealing. If the FCA had more resources (only £0.5bn pa) surely it would catch the rest of us.

    Shameful, utterly unfair, unjust and shameful.

  2. Just to say I agree with Soren Lorenson’s previous comments. The actions of the regulator have, indeed, been shameful.

  3. Cant believe that there is nobody out there that is intelligent and resourceful enough to actually challenge the findings and lock horns. Its so sad that the community gets a kicking because they failed in their duties in the first place.

  4. Why was JJFS picked on? They no doubt had to pay a hefty ransom to the FSCS facilitated by those bandits Herbert Smith. Many of us who stumped up regarded this as a fine. Now the regulator has added insult to injury.

    Soren has put the other points most succinctly.

  5. Perhaps those of us who stand up and say what they believe have reason to fear

    • Now that statement, right there, Alan is absolutely correct, and exactly the outcome the regulator is striving for and at least maintaining.
      Its a good thing (from my minds eye) you and a good few like you don’t scare to easily ?

  6. Well, we may well find out pretty soon the rights and wrongs of the affair – the court action in the US on behalf of SLS Capital investors may well yield an outcome soon and the Keydata Directors have their first day at the Upper Tribunal (Financial Services) on 14th January (which will focus in part upon The FSA/FCA’s actions as regards Lifemark). If SLS investors (now largely represented by the FSCS to whom many claimants assigned their rights) receive all of their money back (possibly plus damages) and the FSA/FCA are found to be at fault (at least in part) for the collapse of Lifemark, the ramifications for IFAs (and their PI insurers) caught up in this affair are intriguing to say the least!

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