Regulation  

Keydata founder claims victory in build up to hearing

Keydata founder claims victory in build up to hearing

Keydata Investment Services founder Stewart Ford has claimed a victory in a preliminary hearing of his court battle against the Financial Conduct Authority.

Mr Ford appeared at the Upper Tribunal in a case management hearing as part of his challenge to an FCA fine.

The FCA had argued the case should be split up into two cases dealing with Mr Ford’s alleged misconduct and, if this is upheld, what penalty is appropriate.

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Mr Ford said: “The authority had applied to try and split the case into two parts but the judge ruled in my favour that it should be heard as one.

“My concern was the authority was trying to pick and choose what evidence would be heard in the Upper Tribunal but I want them to have a look at everything.

“The FCA wanted to deal with my conduct in a vacuum without taking into account all the things I have been saying about the failure of Lifemark and SLS, which were not down to me.”

Mr Ford said the actual hearing into his case would probably not take place until next year after the judge ruled against the FCA’s attempt to have it heard more quickly but another case management hearing is scheduled for October.

Keydata Investment Services designed and sold life settlement policy-based investment products to retail investors via independent financial advisers.

Products were underpinned by investments in bonds issued by Luxembourg vehicles SLS Capital and Lifemark.

From December 2005 to June 2009, more than 37,000 investors purchased the products, investing over £475m.

In the Lifemark Bonds alone, £373.2m was invested by 30,906 retail customers, via IFAs. The Financial Services Compensation Scheme has subsequently made payments to investors in the products of more than £330m.

In May the FCA announced it had decided to fine Mr Ford £75m and former Keydata sales director Mark Owen and former Keydata compliance officer Peter Johnson £4m and £200,000 respectively.

It cited a “lack of integrity” and “reckless” actions while also saying the regulator itself had been “deliberately misled”.

But Mr Ford has alleged 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.

The FCA declined to comment.