Regulation  

‘I will be glad to see FCA in court’: Stewart Ford

‘I will be glad to see FCA in court’: Stewart Ford

Stewart Ford, the founder and majority share owner of Keydata Investment Services, has claimed he will be “glad to see the FCA in court” after the regulator hit him with a £75m fine.

Mr Ford said an appeal against the watchdog’s decision would allow him to put his case across after six years of criticism.

He said: “The fine means nothing because I am taking the FCA to the upper tribunal.

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“I am glad it has now come to this stage. Once the spotlight is on the FCA, it will find itself wanting.”

Mr Ford claimed that the fine was unsurprising and “business as usual” for the regulator.

He also revealed that he would shortly file a claim against the FCA and PricewaterhouseCoopers seeking damages of £650m.

The basis of the claim is that the then-FSA knowingly exceeded its statutory authority to bring down Keydata in an attempt to prove it could be effective following the financial crash.

According to Mr Ford, the FSA was “aided and abetted at every stage” by auditors PwC.

His comments came as the FCA announced it had also decided to fine Mark Owen, a former Keydata sales director, and Peter Johnson, whom the FCA claims was a former Keydata compliance officer. Mr Johnson said he is also contesting the decision notice.

The regulator decided to fine Mr Owen £4m and Mr Johnson £200,000, and ban all three individuals from performing any role in regulated financial services.

According to the FCA, the individuals failed to act with integrity, as well as misleading the FSA on various occasions in relation to the performance of the investment products related to Keydata.

All three have referred their three individual decision notices from the FCA to the upper tribunal.

Keydata designed and sold investment products to retail investors through IFAs. These products were underpinned by Keydata’s investment in bonds issued by Luxembourg special purpose vehicles SLS Capital S.A and Lifemark S.A.

These vehicles then invested in porfolios of life settlement policies.

Meanwhile, PwC said: “We have had no contact from Mr Ford, so are unable to comment.”

The FCA declined to comment.

Timeline:

According to the FCA, between 2005 and 2009 Keydata provided approximately £475m of SLS and Lifemark-backed retail products.

June 2009 - Keydata is placed into administration on the FCA’s application on the basis that Keydata was insolvent.

July 2009 - the Serious Fraud Office begins investigating Keydata following a referral by the then-FSA.

2 November 2012 - The SFO reveals that efforts to trace assets linked to the case have not been successful and closes the case.

2 July 2014 - Keydata is dissolved

May 2015 - FCA releases decision notices

Background

In the 63-page decision notice issued to Mr Ford, the FCA notes arguments made by Mr Ford, including claims that the regulator failed to publicise its concerns about life settlement-based products early enough and that the watchdog took over-aggressive action against Mr Ford and Keydata as a result of its alleged over-leniency arising from the banking crisis.