Stewart Ford and Mark Owen, former chief executive and sales director, respectively, of failed Keydata Investment Services, have been banned and fined by the UK’s Upper Tribunal, upholding an earlier Financial Conduct Authority’s (FCA) decision.
The tribunal found that Ford and Owen acted without integrity and did not co-operate with the Financial Services Authority, the FCA’s predecessor, fining them £76m ($98.9m, €86.8m) and £3.2m respectively.
Keydata produced and distributed structured products for retail customers. The company started trading bonds issued by Luxembourg-based company SLS Capital in 2005, but it did so without conducting due diligence and with misleading brochures.
In 2006, Ford created Lifemark SA, replicating the same SLS structure, beneficially owned by himself, and, over the following three years, was able to extract fees totalling £73.3m.
Money for nothing
The tribunal said that the £73.3m in payments were received for either “no services whatsoever” or “for services unrelated to [the Lifemark] products” and “could not be justified commercially”.
Owen received more than £2.5m in undisclosed commissions from Ford. Although both men claimed these payments to have been unrelated loans, the tribunal concluded this was a “fabrication” displaying a “lack of integrity”.
Mark Steward, executive director of enforcement and market oversight at the FCA, said:“Keydata sold complex structured products backed by life settlements based on misleading brochures and without properly assessing whether the products could meet what was promised.
“The tribunal found that Mr Ford bears primary responsibility for this, deliberately setting aside his regulatory responsibilities driven by his desire to maximise and preserve financial gain for himself. Those who commit such misconduct have no place in the financial services industry.”