View more on these topics

Keydata founder Ford accuses FSA of £30m client losses

Keydata founder Stewart Ford has accused the FSA of causing £30m of losses for investors in the failed firm’s SLS Capital funds, in claims the regulator has denied.

Ford says the FSA and Keydata administrator PricewaterhouseCoopers blocked an attempt by him to rebuild the SLS portfolio of life settlement policies which would have seen investors’ initial capital and income payments preserved.

Around 410 Keydata investors were invested by the group in bonds managed by Luxembourg-based SLS, but the their £103m of investments were misappropriated in a fraud.

The Financial Services Compensation Scheme has since paid out to cover most investors’ capital losses although only up to a cap of £48,000 per investor. In addition the investors lost out on income payments of 7.5 per cent per annum that were promised when they invested. The FSCS compensation also resulted in a levy on the IFA industry.

Now Ford has said the client losses add up to £30m and were unnecessary as he had proposed to finance the rescue of the bonds through the transfer of a life settlement portfolio from his family trust Billericay.

He says: “To this day, the FSA and PwC have not offered any explanation as to why they rejected the SLS Capital rescue proposal. However, their reasons are clear enough to me – it simply did not fit their respective agendas.”

Ford says his bailout plan involved the selling of policies by his £10.9m family portfolio to cover income payments and also purchase other distressed life settlement portfolios that he expected to deliver sufficient growth to return the investors’ capital.

The statement comes after Ford’s attempts to assist in the rescue of another group of Keydata investors – whose portfolios of life settlements held by Lifemark hang in the balance – was last week blocked by Lifemark’s provisional administrators KPMG.

An FSA statement says: “On the basis of the information Ford provided to the FSA at the time about his proposals to rescue SLS, we were unable to conclude that it was in the best interests of investors. Ford is under investigation by the FSA and our concern about him is a relevant factor we have to consider in the context of any proposal he puts to us. nThe protection of consumers is at the forefront of our minds when considering any proposals. Keydata was placed into administration last June by the High Court. At no point did the management of Keydata oppose this application.”

Recommended

N&P reassured Keydata client that investment would deliver

Norwich & Peterborough Building Society reassured a concerned Keydata client that his investment would perform strongly just months before the firm’s collapse. In a letter sent in October 2008, seen by Money Marketing, an N&P financial planner told a worried investor in Keydata bonds: “Rest assured this investment is one of the few that will […]

context.jpg

Out of Context

“I learned to count wads of £20 notes in 20 seconds flat by listening to a tape narrated by Noel Edmonds.”Mark Blackwell, managing director, Xit2 on his training as a bank clerk at Natwest. “Listen, we are Scottish, we do not get excited by much and we certainly did not get excited by the football […]

1

Towry appoints chief investment officer

Towry has appointed Dr Robert Dawkins as chief investment officer. Dawkins was previously head of multi-manager at Aberdeen Asset Manager and, prior to that, managing director of RBS Asset Management Ltd. He has also held positions at Coutts, LCF Edmond de Rothschild and John Govett.  Towry CEO Andrew Fisher says: “We are delighted to welcome […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. If somebody accused me, rightly or wrongly, of £30m client loss I would sue, if I had pots of money that is.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com