A judge has struck out Keydata founder Stewart Ford’s £600m legal claim against the FCA.
Ford, along with former Keydata sales director Mark Owen and three Keydata related companies: – LAS Global Limited, LAS International Limited and Tandem Marketing Partners Sarl – began their case against the FCA for misfeasance in public office and conspiracy to injure last month.
Ford applied to put the claims on hold until an appeal of his record £75m fine from the regulator is settled in the Upper Tribunal, during which time he claimed more evidence would emerge to assist his case.
The FCA in turn applied for a summary judgment against Ford or, at the least, security for costs should the claims go ahead.
The claims against the FCA would have amounted to in excess of £633m; £122m plus interest per claimant.
Judge Christopher Butcher granted the FCA’s application for a strike out this morning.
His judgment reads: “The allegations of bad faith, which are an essential element of a claim of misfeasance, are inadequately particularised…The particulars of claim does not identify the officers at the FSA who are alleged to have acted in bad faith, or what facts form the basis of the inference of bad faith on the part of any specific individuals. Because of this all five claimants’ claims in misfeasance are deficient and embarrassing.”
Arranging an appeal
Ford told Money Marketing he was likely to appeal the judgment:
“This battle might be lost but we haven’t lost the war. It’s only half time.”
“I’m very disappointed that the judge hasn’t allowed me the opportunity to wait until the end of the Upper Tribunal. I respect his decision but that doesn’t mean I have to agree with it. It shows the level of immunity afforded to the regulator and senior managers that it is not enough to show they were negligent or grossly negligent.”
An FCA spokeswoman said the regulator welcomed the judgment.
The subject of the claims goes back to then regulator the FSA’s decision to close Keydata, which marketed bonds backed by life settlement products through advisers, in 2009, leading to a £326m Financial Services Compensation Scheme interim industry levy and the loss of around 140 jobs at Keydata.
Of Keydata’s £2.8bn in assets under management, hundreds of millions were later found to be misappropriated through one of the bonds’ Luxembourg-based issuers SLS Capital.