FINED £75M
But self-made man still denies his firm misled 30,000 savers
A SHAMED Scots tycoon is facing a lifetime ban after being handed a record fine for an investment scandal that cost 30,000 investors their savings.
Stewart Ford, 51, was fined £75million by the city regulators after ordinary savers were sold so-called ‘death bonds’ by his firm, Keydata Investments.
But despite the record fine, the wealthy banker yesterday insisted that he was the victim and vowed that he would fight the decision.
The Financial Conduct Authority also fined the firm’s former sales director Mark Owen £4million, while ex-compliance officer Peter Johnson faces paying £200,000. The FCA wants to bar all three men from any role in regulated financial services.
But Ford, speaking at his £2million three- storey townhouse in Edinburgh yesterday, insisted it was his life that had been ruined and not those of the investors.
Blaming the financial watchdogs, he said: ‘They’ve ruined my life but I’m coming back. I’ve had highs and lows since I was a child.
‘I didn’t do anything wrong. I’m an honest entrepreneur and under my watch not one person ever lost one penny.
‘They have behaved with an astonishing amount of arrogance and they have tried to make this working- class boy the scapegoat.’
An estimated 37,000 savers were sold £475 million worth of investments by Keydata between 2005 and 2009.
The firm sold investments through financial advisers, based on second-hand life insurance policies bought from elderly people in the US, issued by two Luxembourg companies SLS Capital and Lifemark.
Since Keydata went into administration in 2009, customers have been forced to claim back nearly £330million from the Financial Services Compensation Scheme, which makes payouts to savers with cash tied up in collapsed investment firms and banks. The FCA alleges all three of the men ‘failed to act with integrity’ and also ‘misled’ its forerunner, the Financial Services Authority, about the performance of the investment products.
In publishing its decision, the FCA set out its view that ‘Mr Ford and trusts set up for the benefit of his family received some £72.4million in fees and commission on sales of the Lifemark products and that Mr Owen received commissions on sales of the Lifemark products in the amount of £2.5million’.
It added: ‘In the FCA’s opinion, Mr Owen’s commissions were not properly disclosed, nor was Mr Ford’s conflict arising from the payment of these fees and commis- sions adequately managed.’ The FCA said the executives also allowed Keydata to continue selling the Lifemark investments as suitable to include in an individual saving account (ISA), despite being ‘aware it was highly likely’ they were not.
It said the deals were promoted to savers in a way that was ‘unclear, incorrect and misleading’ and that ‘due diligence on the products was inadequate and there were problems with the performance of the portfolio underlying the products’.
Mr Ford is also accused of deliberately concealing problems with the portfolio underlying some of the SLS-backed products, from inves- tors, financial advisers and the City watchdog. But despite the litany of charges, Ford said: ‘I’m no crook. I’m a competent man and a confident man and I know what’s right from wrong.
‘I lived in the high-rise flats in Dumbiedykes, Edinburgh, until I was about ten years old. My mother and father split up and I was whisked off to a children’s home in Colinton. I was told “you’re only here for the weekend” and I was there until I was 18 years old.
‘I decided at a very early age that there were two paths in life – the right and the wrong – and I made a conscious decision that I would live my life on the right path.’
‘I am an honest entrepreneur’