Keydata owner pledges to fight FCA after £75m fine
The bitter wrangle between the Financial Conduct Authority (FCA) and Keydata reached boiling point yesterday as both sides promised legal action to decide the long-running dispute.
The financial regulator announced it is seeking record fines against three former managers of the investment service, claiming the company mis-sold complex products known as “death bonds” to consumers.
The watchdog has fined former chief executive Stewart Ford £75m, former sales director Mark Owen £4m and former compliance officer Peter Johnson £200,000, and wants to ban them from working in the regulated financial services industry in the future.
However all three men have appealed the FCA’s proposed fines to the Upper Tribunal that hears appeals from regulatory decisions.
And yesterday Stewart Ford said he is seeking £650m damages from the FCA as well as from auditor PwC.
In a statement, Ford said: “The basis of the claim is that, prior to its abolition, the failed financial regulator, formerly known as the Financial Services Authority (FSA) knowingly exceeded its statutory authority in order to bring down Keydata as a blatant attempt to prove it could be effective after its disastrous handling of bank regulation in the lead-up to the 2008/9 financial crisis.”
Yesterday Ford told City A.M.: “These people have pulled the tiger’s tail and now that tiger is going to bite them.”
Keydata, which was marketed to retail investors via financial advisers, was declared insolvent in June 2009 in part due to the discovery that some of its plans, though marketed as eligible for ISA investments, did not hold ISA status. The FCA said the managers “failed to act with integrity and also misled the then Financial Services Authority (FSA) on a number of occasions in relation to the performance of the investment products”.