By Kirstin Ridley
LONDON, Nov 6 (Reuters) - Stewart Ford, the former CEO of now-defunct “death bond” company Keydata, has lost a protracted battle against Britain’s financial regulator over a record 76 million pound ($99 million) fine and a ban from regulated financial services.
The Financial Conduct Authority said on Tuesday that London’s Upper Tribunal, which hears challenges against its decisions, had upheld its fines and bans against Ford and Mark Owen, the former sales director of Keydata Investment Services.
Owen faces a 3.24 million pound fine.
Reuters could not immediately reach Ford and Owen, who the FCA said had represented themselves in court, for comment.
Thousands of often elderly people invested more than 450 million pounds into Keydata, which promoted “death bonds” issued in Luxembourg and backed by a life settlement portfolio. Many lost money in one of Britain’s biggest personal investment scandals in decades.
Keydata, which was fast-tracked into administration in 2009 after the regulator declared it insolvent and was dissolved in 2014, sold complex structured products based on misleading brochures and without adequate due diligence, the FCA said.
Traded life insurance policies are considered high-risk investments by the regulator. They depend in part on the death of the original insurance holder; often wealthy former professionals living in the United States.
The Tribunal found that Ford bore primary responsibility. Mark Steward, the FCA’s head of enforcement and market oversight said: “Those who commit such misconduct have no place in the financial services industry.”
Ford extracted around 73.3 million pounds in fees from the business. But these payments were received for “no services whatsoever” or for unrelated services and “could not be justified commercially”, the Tribunal said.
The UK Serious Fraud Office (SFO) dropped an investigation into Keydata in 2011 because of a lack of evidence. ($1 = 0.7649 pounds) (Reporting by Kirstin Ridley, editing by Huw Jones and Alexander Smith)