The FCA has described Keydata founder Stewart Ford’s £600m legal claim against the regulator for its role in the collapse of his investment company as “fanciful”.
Yesterday Ford, along with former Keydata sales director Mark Owen and three Keydata related companies: – LAS Global Limited, LAS International Limited and Tandem Marketing Partners Sarl – began legal action against the FCA for misfeasance in public office and conspiracy to injure.
The claims against the FCA are for £122m plus interest per claimant, totalling in excess of £633m between them.
Ford believes the decision by the FSA and HM Revenue & Customs to shut down Keydata in 2009 fell outside the regulator’s statutory objectives.
He is arguing it was taken without giving Keydata a full chance to respond and was made on the basis of an inaccurate solvency report produced by consultancy PwC.
The FCA is applying to strike out the claims and get a summary judgment against Ford or, if that fails, seeking security for costs from Ford.
The FCA says it has written to Ford to submit evidence to support his claims against the regulator three times, but that he only filed a summary of his case this week.
The FCA argued for Ford’s claim to be successful, the documents produced at trial which show correspondence between the FSA and HMRC and how they made the decision to wind down Keydata would have had to have been an “elaborate charade” to cover up a conspiracy against the firm.
FCA’s counsel Laurence Rabinowitz QC said: “In the circumstances where the only evidence is that produced by the FCA, the evidence is clearly one way and entirely unanswered.
“There is nothing there that the claim is anything other than fanciful.”
Rabinowitz said the FCA also objected to putting the case on hold, known as a stay in proceedings.
He said: “We strongly oppose an application to stay. One of the reasons the application to stay should not succeed is the claim is in any event hopeless. There is no reason it should hang over the FCA a moment longer.”
Ford is representing himself in proceedings. The FCA has instructed Dentons as legal counsel.
Ford argued the case should be stayed because further disclosure to come from the Upper Tribunal proceedings would assist his case.
Ford said: “It’s no exaggeration that the FSA, through the medium of its investigation team, have destroyed my life. They’ve done so dishonestly and illegally.
“Until my dying breath I will not stop pursuing these people because it’s a disgrace what they did.”
At the time Keydata was shut down it employed around 140 staff and had around £2.8bn in assets under management. It marketed bonds backed by life settlement products through advisers.
The company’s administration in June 2009 prompted a £326m Financial Services Compensation Scheme interim industry levy in 2011, while hundreds of millions in assets were also misappropriated through one of the bonds’ Luxembourg-based issuers SLS Capital.