The UK’s financial regulator today has confirmed its largest-ever fine on an individual, saying in its ‘final notice’ that the former boss of failed firm Keydata received a £76 million ($98 million) penalty and a ban from regulated financial services.
The City regulator handed down its hefty fine on Stewart Ford, the former CEO of now-defunct Keydata, following one of the UK’s biggest investment scandals in which people were mis-sold $650 million worth of risky investment products.
Nearly 37,000 people lost out as a result of the poor performance of the so-called “death bonds” between 2005 and 2009. The term refers to worthless life insurance policies that were bought from elderly citizens in the US and promoted by the company that was dissolved in 2014.
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The tax-free bonds allowed its buyers to invest in second-hand life insurance policies, which would cash them in when the original owner died. However, the UK regulator ruled that such risky products were not suitable for ordinary private investors.
FCA forces Keydata out of business
“The financial penalty must be paid in full by Mr Ford to the Authority by no later than 1 February 2019, 16 days from the date of this Final Notice. If the financial penalty is not paid If all or any of the financial penalty is outstanding on 2 February 2019, the Authority may recover the outstanding amount as a debt owed by Mr Ford and due to the Authority,” the regulator further explained.
Ford has criticized the way the regulator has dealt with his case and challenged the fine in the High Court. He said Keydata was tossed aside by the FCA, which was “hell-bent on destroying a successful and well-run business in order to justify its continued existence.”
But in November 2018, London’s Upper Tribunal upheld its fines and bans against Ford and two other Keydata executives — Mark Owen, the former sales director, and Peter Johnson, the former compliance officer.