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SFO extends probe to cover Lifemark

The Serious Fraud Office has widened its Keydata probe and is now investigating the activities, control and ownership of Luxemburg-based life settlement vehicle Lifemark.

The SFO is also investigating the activities of Keydata in marketing and selling products underpinned by bonds issued by Lifemark. Around 23,000 Keydata clients invested around £349m in such plans.

In an update last week, the SFO also revealed it has traced a “sizable proportion” of assets which had been invested through SLS Capital. Around £103m of Keydata assets were invested through SLS Capital.

It confirms that these assets were liquidated and funds were misappropriated in order to meet other business needs of deceased businessman David Elias, the then ultimate beneficial owner of SLS, to the detriment of Keydata and other investors.

When asked whether the FSCS would attempt to reclaim any of the costs of SLS Capital losses currently being paid by IFAs as part of the £80m interim levy, the FSCS says it has a duty to “pursue all and only such recoveries as it considers are likely to be both reasonably possible and cost-effective to pursue”.

An FSCS spokeswoman says: “The FSCS’s approach to recoveries is determined on a case-by-case basis depending on the specific facts and legal issues.”

The SFO officially launched an investigation into Keydata in July last year after being called in to examine a suspec-ted fraud following the disappearance of £103m Keydata products invested by 5,500 clients in SLS Capital.

Lifemark is in administration and issued a notice to bondholders on March 3 declaring several bonds underpinning Keydata plans had defaulted on income payments. It suspended income payments to investors in order to preserve liquidity to maintain payments of insurance premiums under the existing policies.

Baronworth Investment Services director Colin Jackson says: “If they have identified money, the FSCS should make every effort to get it.”

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