Two other senior managers of the company, Mark Owen and Peter Johnson, are due to be fined £4m and £200,000 respectively, and the regulator said it plans to ban all three men from holding any future jobs in the UK regulated financial services sector.
The FCA said in a statement that the three men have decided to contest the decision in the Upper Tribunal which is to make a final ruling on the appropriate action the FCA can take.
In its decision, the FCA said Keydata Investment Services (Keydata) designed and sold investment products to retail investors via IFAs, which were underpinned by investment in bonds issued by two Luxembourg special purpose vehicles called SLS Capital S.A (SLS) and Lifemark S.A (Lifemark). In turn SLS and Lifemark invested in portfolios of life settlement policies.
“The products were sold as eligible for ISA status, but they were not, in fact, eligible,” the FCA said.
The regulator said that in its opinion Ford, Owen and Johnson 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.
In justifying the fines imposed the FCA said that Ford and trusts set up for the benefit of his family had received some £72.4 million in fees and commissions on the sales of the Lifemark products, and that Owen received commissions on sales of the Lifemark products in the amount of £2.5 million.
“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 commissions adequately managed,” it said.
“In the view of the FCA, with regard to the SLS-backed products, Mr Ford deliberately concealed the problems with the portfolio underlying these products from investors, IFAs and the then FSA.”
“The FCA further considers that the individuals deliberately misled the FCA by making false representations to the FCA in compelled interviews about the performance of the investment products, having failed to disclose to the FCA problems with the SLS portfolio which impacted on the SLS products’ performance.”
The FCA said it considered that Johnson failed to ensure the regulator was aware of problems with the products and their financial promotions, identified by Keydata’s professional advisers and that Ford and Owen both failed to disclose the significant personal benefits and commissions they received from the sale of the Lifemark products.
All three men had unsuccessfully applied to the Tribunal for an order preventing the FCA from publishing its decision.
