Keydata boss calls for pause in legal battle amid FCA disclosure row


The former chief executive of collapsed investment company Keydata has applied to the Upper Tribunal for more FCA documents relating to the case.

Stewart Ford is currently appealing a £75m fine from the regulator for his role in the company’s administration.

Keydata, which distributed life settlement bonds through IFAs, entered administration in 2009 after authorities deemed it had to pay back millions in tax because its products did not qualify for ISA status as the company thought.

The collapse resulted in an interim Financial Services Compensation Scheme levy of £326m three years later, while more than £100m of investors’ money was found to have been misappropriated.

In a letter to lawyers instructed by the FCA, and seen by Money Marketing, Ford claims the regulator failed to disclose information relevant to the appeal ahead of the Upper Tribunal hearing, and has not provided some further relevant material since the tribunal started under “secondary disclosure” rules.

In a case management hearing earlier this year, Judge Roger Berner denied five items of Ford’s original disclosure requests, but asked the FCA to provide secondary disclosure of “any further material, beyond that already disclosed in these proceedings, which might reasonably be expected to assist each applicant’s case”.

Ford says in the letter though some material has been disclosed, there is still material outstanding that he thinks should be disclosed.

The letter reads: “After several years of asking, only to be ignored time and time again by the FSA and your client, I see no point in repeating my request for full and proper disclosure. Instead, I will shortly be making an application to the Upper Tribunal for full disclosure to be made by your client in accordance with the tribunal rules.”

Ford has also asked the Commercial Court to delay a £650m claim he is bringing against the FCA for “misfeasance in public office” until the material has been disclosed.  The FCA applied to have the misfeasance claim struck out earlier this year.

In the letter Ford says: “Once your client has, at long last, complied with its secondary disclosure obligations in the Upper Tribunal, AAI [Consulting Limited, the company that has taken assignment of Ford’s estate rights under bankruptcy and of which Ford’s wife Anna is a director] will be in a position to instruct counsel to amend the particulars of claim in the present matter, based on the material disclosed. Until then, justice requires that the hearing of your client’s applications for strike-out and/or summary judgment and for security for costs to be adjourned.”

The letter adds: “Given your client’s long history of intransigence in relation to the disclosure process, I don’t expect it will consent to such an adjournment. I am therefore preparing an application to the Commercial Court for a stay of current proceedings until a date which is not less than 90 days after the FCA has fully and properly discharged its secondary disclosure obligations.”

It is understood that the FCA’s lawyers has not agreed to the adjournment.

Ford will also ask the Upper Tribunal for an order allowing him to use any disclosed material from the Upper Tribunal in the misfeasance claim.

The FCA declined to comment.