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Keydata boss: I have been a victim of injustice

Keydata founder Stewart Ford

As he loses an appeal against a £79m fine and receives a ban from the FCAKeydata founder Stewart Ford provides an exclusive statement to Money Marketing protesting his innocence

In the matter of “Stewart Owen Ford and Mark John Owen v The Financial Conduct Authority: [2018] UKUT 0358 (TCC) – Gov. UK

1.                  I do not and cannot agree with the Decision of the Upper Tribunal

If I must accept it, I do not and cannot agree with the Decision of the Upper Tribunal published yesterday afternoon, Tuesday, 6th November 2018, in the matter of “Stewart Owen Ford and Mark John Owen v The Financial Conduct Authority: [2018] UKUT 0358 (TCC) – Gov. UK”.

I am as disappointed with the Upper Tribunal as I am with its Decision.

2.                  I have been the victim of a grave injustice

Without infringing the law or my conscience, I say and believe that I have been the victim of a grave injustice. For those who truly know me, you will be aware that this Decision of the Upper Tribunal runs counter to every fibre of my being. My honour, my good name, mycompetence and my integrity have been impugned.

Prior to the intervention of the Financial Conduct Authority[1]I had enjoyed a previously“unblemished regulatory record,”as recognised by the Upper Tribunal at Paragraph 43 of their Decision.However, during these past 10 years and more, I believe for questionable motives and in an effort to discredit me, I have been the subject of a concentrated and sustained attack by theFinancial Services Authority/Financial Conduct Authority.They failed, miserably, to provide me with a fair and balanced investigation and the Upper Tribunal has now compounded that injustice with yesterday’s Decision.

In a much larger sense, the trust formerly placed in me by Keydata investors demands that I immediately address the Upper Tribunal’s Decision.

3.             “Not the integrity of an individual as a general matter”

It is of little comfort that the Upper Tribunal has correctly restated the Law at Paragraph 16 of their Decision:

“That recognises that what is at issue is not the integrity of an individual as a general matter, but integrity in the particular sphere of the carrying out of that individual’s controlled functions in the regulatory environment.  A person may be thought of as having impeccable integrity in other areas of life, but integrity may nonetheless be brought into question as regards the conduct of that individual in the performance of the controlled functions.”

The Upper Tribunal has also recognised that it not necessary for a person to have been dishonest to make a finding of lack of integrity.

4.             Not “Fraud”

It is of some further comfort that in Paragraph 521 of their Decision the Upper Tribunal states that:

“… it has never been the Authority’s case that Mr Ford or Mr Owen were engaged in fraud …”

            Again, at Paragraph 523 that of their Decision the Upper Tribunal states that:

“… it is clear on the evidence before us that actions were being taken by … others … without any notice to Mr Ford or anyone else at Keydata …”

5.             A “difficult and challenging upbringing”

At Paragraph 70 of their Decision the Upper Tribunal mentions my “difficult and challenging upbringing” and having been “born into a working class background in Scotland”.However, from an early reading of their Decision, I am uncertain if the Upper Tribunal mentions my early challenging personal circumstances so as to arose pathos, or rather perhaps as the context to their belief that an entrepreneur of my particular background is unsuitable for leadership within the UK financial services industry?

6.                  “The position of Mr Ford was a matter of some dispute”

It was and shall remain my belief that I resigned as chief executive officer of Keydata in April 2007.  As stated at Paragraph 7 sub-paragraph 3 of the Upper Tribunal’s Decision:

“… From that date, Mr Ford’s day-to-day involvement in the management of Keydata changed fundamentally, as did his state of mind with respect to his role at Keydata.”

As stated at Paragraph 81 of the Upper Tribunal’s Decision:

“… from April 2007 Mr Ford’s case is that he stepped down as CEO of Keydata and remained involved with the company only as Non-Executive Chairman … to develop international product distribution for investment products distributed by [Keydata].”

            As stated at Paragraph 86 of the Upper Tribunal’s Decision:

            “… At that time Mr Ford had resigned as CEO of Keydata and become resident in Switzerland with an international focus.  Mr Ford was developing international projects and able to access the international distribution projects.  Mr Ford denied that in effect he was simply carrying on the same role he had at Keydata as an executive CEO.”

            At Paragraph 88 the Upper Tribunal accepts:

            “We accept that from April 2007 Mr Ford spent less time on the day to day activities of Keydata.  He was engaged with other, more strategic, activities, a substantial part of which took place outside the UK …”

At Paragraph 259 the Upper Tribunal is unable to accept the [Financial Conduct] Authority’s submission:

“Having considered the evidence, we are unable to accept the Authority’s submission that the “global arranger” role is a retrospective contrivance … It is evident to us that Mr Ford did work on establishing a more global reach for the Lifemark offering, and that he was engaged by Orietex and LAS Global in a consultancy capacity for the purpose of fulfilling the obligations to Lifemark.”

7.                  Keydata’s SLS and Lifemark Products – “We accept that he is a problem-solver”

I say that I contributed very substantial sums of money in protection of the interests of the Keydata investors. Further, at Paragraph 298 of their Decision the Upper Tribunal accepts:

“… we accept that Mr Ford’s view of himself in this way was a genuine one, and not a mere contrivance.  We accept that he is a problem-solver.”

At Paragraph 371 of their Decision the Upper Tribunal accepts:

“…we accept that Mr Ford hoped that Mr Elias would rectify the situation, principally by procuring redemption of the SLS bonds held by Keydata investors, and that in default of that Mr Ford himself intended to do what he could to salvage the situation”.

At Paragraph 409 of their Decision the Upper Tribunal accepts:

“… we accept that Mr Ford took an optimistic view as to the achievability of the Lifemark rates of return, the Lifemark risk parameters and the Lifemark costs.  That view was understandably shared by others in Keydata, and in particular by Mr Owen…”

Again, at Paragraph 448 of their Decision the Upper Tribunal accepts:

“… we accept that, in making timely payments to bondholders despite the non-receipt of income payments from SLS, Keydata was seeking to discharge its own obligations to those investors.  That may, we accept, have been born out of a genuine desire to ensure that Keydata investors were not inconvenienced.”

8.                  Keydata had been a successful company prior to the intervention of the Financial Services Authority

It was and shall remain my position, as stated at Paragraph 77 of the Upper Tribunal’s Decision, that:

“Keydata was a successful company, which was well-known and appeared to be highly regarded in the IFA community as a distributor of leading income and growth products.  It won a number of industry awards.  It had a substantial staff, numbering some 140 people.”

The review of Keydata’s Systems and Controls conducted by Grant Thornton, dated 29 January 2009, only six months prior to the wrongful intervention of the Financial Conduct Authority is cited at Paragraph 77 of the Upper Tribunal’s Decision and states:

“… The firm demonstrated to us a clear commitment to develop and maintain an adequate structure of systems and controls.

We found that in most respects the firm’s systems and controls are appropriate for the size and nature of its business and it has staff with appropriate skills and experience to operate them.”

9.                  It is and shall remain my fundamental belief

It has been widely accepted, including as evidenced by litigation in this and other jurisdictions, that Keydata, its investors and myself were victims of a very sophisticated fraud in respect of the SLS products. Further, despite yesterday’s Decision of the Upper Tribunal, it is and shall remain my fundamental belief, that there were no risks associated with the Lifemark portfolio and that prior to the wrongful intervention of the Financial Services Authority in June 2009, all ofKeydata’sLifemark Products had performed as forecast and all obligations to Keydatainvestorshad been discharged in full and on time.It is and shall remain my fundamental belief that justice has not been served by yesterday’s Decision of the Upper Tribunal.

[1]Previously the Financial Services Authority [FSA] – disbanded by Statute as not fit for purpose



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