The Information Commissioner’s Office says law firm Herbert Smith is likely to have breached data protection rules in disclosing the names of Keydata investors and the amount they have been paid in compensation.
Herbert Smith is acting on behalf of the Financial Services Compensation Scheme to pursue advisers that recommended Keydata products in a bid to recoup compensation paid out to Keydata investors.
In October, the law firm wrote to over 500 firms that sold Keydata products backed by Luxemburg-based vehicle SLS to start the legal process of recovering Keydata compensation. It began proceedings against advisers who sold Lifemark-backed Keydata products last month.
Alongside the letters sent to Keydata SLS advisers, Herbert Smith sent out a claim form and details of affected clients and how much compensation they were paid. It included details of all other firms that sold Keydata SLS products, including client names and compensation amounts.
An adviser who recommended SLS products, who wants to remain anonymous, complained to the ICO about the level of information disclosed.
The response from the ICO, sent last month and seen by Money Marketing, states: “We have already decided it is unlikely that Herbert Smith has complied with requirements of the Data Protection Act because they should not have disclosed the information. We believe steps could and should have been taken to remove the client information which was not applicable to that specific organisation before it was sent out.”
The ICO has decided not to take the matter further as it says Herbert Smith has taken remedial action. Herbert Smith, the ICO and the FSCS declined to comment on the data protection breaches.
Financial Escape director Phil Castle, who is facing a liability over Keydata Lifemark claims, says: “The mistakes in the handling of the Keydata debacle appear to be continuing. Herbert Smith has got away with a slap on the wrist.”