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Ford wins judicial review against FSA

Keydata founder Stewart Ford has won the judicial review he brought against the FSA challenging the use of legally privileged information in its investigation into Keydata.

Mr Justice Burnett formally handed down his judgment on the case today.

At the two-day hearing at the Royal Courts of Justice in London in July Ford’s lawyer Mr Malek argued that emails which formed the basis of the FSA’s warning notice against Keydata and subsequent investigation reports were subject to legal professional privilege.

The hearing centered around emails that were passed from Ford’s former lawyers Irwin Mitchell to the FSA via Keydata’s administrators PricewaterhouseCoopers. The nature of the emails cannot be disclosed due to reporting restrictions.

Both Malek and lead counsel for the FSA Mr Thanki agreed that in passing the emails to the FSA, PwC had waived the legal privilege which applied to Keydata. However Malek argued that Ford, sales director Mark Owen and compliance officer Peter Johnson still retained individual privilege over the emails in question.

In his judgment today Mr Justice Burnett says: “I am satisfied that the claimant has established by evidence that he enjoyed joint legal privilege with Keydata in those two communications. It is accepted that PwC’s waiver of privilege on behalf of the company did not impact on the claimant’s privilege.

“It follows that the FSA may not rely upon the content of those communications in the regulatory proceedings against Keydata or the executives.”

A further hearing will be held to determine the implications of today’s ruling on the FSA’s investigation into Keydata.      

The law firm Withers represented Ford at the High Court hearing. Withers partner Harvey Knight says: “This episode raises serious questions about the regulator’s own conduct.  In light of this ruling, there can be no doubt that the FSA needs to take a long, hard look at its procedures and how it conducts itself.”

Ford has also called for a public inquiry into the way the FSA has carried out its investigation into Keydata.


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There are 13 comments at the moment, we would love to hear your opinion too.

  1. Unbelievable ….
    Finally someone has shown these bunch of muppets up for what they are .. hopefully now us IFAs will get our levy back?

  2. Ha ha ha ha

    I wonder if Ms Cole will sack herself quoting she is “not a fit and proper person” and fine herself a nice few K to boot.

  3. This is going to cost us, sorry the FSA, no us a small fortune in legal expenses again. Please Hector just aknowledge you have been beaten on this one and agree damages, we cannot afford any increase in your costs.

  4. Follow on to Anonymous – 3.00pm

    One assumes that the FSA sought legal advice on the issues involved, and proceeded on the basis of that advice.

    If the JR ruling establishes (as it appears to do) that the legal advice given to the FSA was deficient, one presumes the FSA will at the very least consider whether a PI claim against the legal advisers involved has merit – before considering any increase in fees to recover the costs and any damages.

  5. Re Cassandra’s comment:

    Well it would seem reasonable to me also. But as the FSA can simply charge the regulated more to cover the legal costs involved, do you really believe that the FSA will bother with litigation or just expect us to cough up more? Previous experience suggests the latter is more likely.

  6. Whether or not the advice given to the SFA was good, or not, they accepted it and acted upon it with a view to breaking the law. That is what it amounts to, and no amount of spin can detract from that. The involvement of PwC also causes alarm bells to ring. How could they have been allowed in the first place to hand out confidential information to any second party, no matter how “bulletproof” they claimed to be. As regards passing the blame on to their specialists and lawyers, well the FSA has a previous record of that and it would not surprise me if they gave it a shot. Anything rather than face the music.

    Hector will be nursing his self inflicted wounds with his head deeply buried in the sand of his now severely weakened armour plated bunker. You can bet he wishes now he never mentioned bullets, especially if his superiors decide to give him a well deserved “bullet”.

    Seriously though, this very important landmark ruling has implications for the industry that should not be ignored. The integrity of Ford and his co-executives has been established as sound and that of the FSA is now seriously in doubt. No position for a regulator to be in. A clean sweep of all at the top should definitely be considered. No later
    rulings, no matter how different to this one, can change the indesputable fact that the FSA have been found wanting in their honesty, their direction, and in their administrative ability.

  7. As a bondholder , I for one would like the Fsa to explain what this means for the over 50k bondholders. What are the implications for us? How has this been allowed to happen, and if the Fsa are making mistakes, then David Cameron and co need to finally step in and sort this out. Now.
    We have been led to believe that ford was a crook, but the guy seems to be leading the Fsa a merry dance, but whatever he is, this needs to be dealt with by the government via a public enquiry.

  8. When in opposition, the Conservatives declared that the FSA was not fit for purpose.
    However, since coming to power, they have not been quite so vociferous. Indeed Mark Hoban has backed them ‘to the hilt!’

    Does’nt say much for his judgement?

  9. Can’t say that I’m comfortable about someone winning a battle (but maybe not the war) on the strength of a legal technicality.

    Of course, the law should be honoured, but is it not the facts that matter?

  10. To anonymous@ 8.58:

    A technicality it may be but when you are judge, jury and executioner as the FSA are in their regulatory powers, you have to be correct and follow a legal due process.

  11. An interesting comparison can be drawn between the FSA’s questioning of what is or is not covered by legal privilege, and its clear reluctance to provide sufficient information to constitute a fulsome report into the happenings at RBS.

    Don’t the public, who have paid handsomely to bail RBS out, have any rights?

    In no way do I make light of the serious effects suffered by many in the Keydata affair, but why does that stark contrast in the FSA’s position, in defending its rights to confidentiality whilst challenging other’s rights to legal privilege, simply conjure up a picture of the FSA ending up with both legs down the one trouser leg, and inevitably falling over?

    Don’t the public deserve much much better?



  13. The vast majority of Ford’s application failed at the leave stage on the basis that it was hopeless. At the hearing, his applications with respect to the Grant Thornton advice were rejected as almost hopeless. Ford won with respect to two emails containing advice from his firm’s solicitors. Why they should have been of any significance in a Warning Notice, is difficult to tell.

    Ford was hauled up for the second time in this saga giving an incorrect witness statement to the court. (He previously denied that a server contained anything relevant to the investigation when it did. Now, he described inaccurately the ownership of Keydata.).

    A plague on all your houses is a more accurate description of the result.

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