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FCA fines Keydata finance director £350,000

FCA fines Keydata finance director £350,000

The FCA has fined former Keydata finance director Craig McNeil £350,000 and banned him from significant influence functions.

In a 27-page final notice published on Tuesday, the FCA said Mr McNeil, who became finance director of Keydata in 2001, was aware the company had used its own resources as income payments to investors, which masked problems.

The FCA said he also failed to ensure Keydata reported the matter to the FCA or to inform the FCA himself when he knew that the matter had not been reported.

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Georgina Philippou, acting director for enforcement and market oversight at the FCA, who will take up her new role as chief operating officer at the regulator in November, said: “It was not reasonable in the circumstances for Mr McNeil to rely on the fact that other directors might eventually tell us what was happening.”

Keydata Investment Services Ltd designed and sold investment products to retail investors via IFAs.

The products were underpinned by Keydata’s investment in bonds issued by Luxembourg special purpose vehicles, including one called SLS Capital SA.

Ms Philippou added: “If Mr McNeil had acted, and acted quickly, concerns about SLS may have come to light sooner.”

After Keydata was put into administration in June 2009, Keydata’s administrators discovered SLS had failed to make certain payments that were due to Keydata in respect of the products since early 2008 and that Keydata had instead funded £4.2m in income payments to investors from its own company resources.

Background

From 26 July 2005 to 7 November 2005, 6,486 retail investors invested £103m in Keydata’s SLS products.

In June 2009, Keydata was placed into administration on the FCA’s application, on the basis that it was insolvent.

Keydata was dissolved on 2 July 2014.