And then, for the majority of Keydata savers, it appeared their money was safe after all (although any gains were perhaps not tax-free). To cap it all, over two months after administrator PwC began its investigations, it emerged that around 200 investors, who thought they had invested in a Keydata plan, had not actually taken out a plan because of a processing error.
Throw in a deceased entrepreneur who had flirted with fraud squads, a missing £103m, a £12m tax bill and a seized computer following a tip-off from a disgruntled employee, and you have the making of a decent TV drama.
But this sorry saga makes for uncomfortable viewing and continues to leave many questions unanswered.
No one has been charged or brought to book by the FSA, or any other authority for that matter. The Serious Fraud Office investigation will take a while, so, for now, questions have to be asked on how was Keydata was able to sell non-compliant Isas for so long under the FSA’s watch?
One angered investor had this to say in an email to me: “The question of how £103m of investors’ money could disappear from an FSA-regulated company is an utter scandal, as is how non-compliant Isas could be marketed for five years. He has a valid point.
The FSA has deflected questions raised by journalists. At the time of the insolvency, the FSA would not confirm how long and how often it had been investigating Keydata. It said the Isa status was an issue for the HMRC, not the regulator.
When it emerged the FSA apparently first became concerned with Keydata marketing literature in 2001, it refused to confirm or deny. The FSA admitted marketing material was part of its investigation but would not comment on whether this included material dating back to 2001.
Keydata should not be the only one in the dock in this scandal. Serious questions on our regulatory system have been brought to light and it would appear that Keydata had come under the FSA’s radar years ago.
What about the Revenue’s role? Can it satisfy us that all Isas are compliant? What checks does it have in place, if any?
As another investor said to me, it is not his fault he invested in non-compliant Isas. He invested in the Isa plans in good faith, in plans that were sold by a regulated company and backed by blue-chip companies. Yet he, along with tens of thousand of investors, is the one paying the price, not the HMRC or the FSA.
When the scandal broke in June, it was deemed to be only about a tax bill triggered by non-compliant Isas. Initially, PwC gave strong hints that investors’ money was safe and a buyer would be found. That has not happened and the bets seem to be on PwC administering the plans until they mature.
Now all eyes are on the Financial Services Compensation Scheme and whether it decides that Keydata is in default. If it does, it would pave the way for investors in Keydata SLS plans and those not invested in plans after all to claim compensation.
You get the feeling that this Keydata drama has at least one more episode left.
Paul Farrow is digital personal finance editor at the Telegraph Media GroupMoney Marketing