Norwich & Peterborough's (N&P) chief executive says its customers lost money in Keydata because of fraud, not mis-selling, and he has passed the buck for compensation to the FSA and FSCS.
Matthew Bullock told BBC Radio Cambridgeshire yesterday he has no regrets about selling Keydata investment products through N&P branches, despite writing to customers as early as 2006 with concerns about the clarity of the provider's marketing material.
He also played down a recent Financial Ombudsman ruling ordering N&P to pay £28,000 compensation to a couple for mis-selling Keydata products, adding the FSA and not the FOS was in charge of the case: "The whole orchestration of the discussion of these cases is in fact being run by the FSA, not the Financial Ombudsman."
He said he would prefer the FSCS to find Keydata collapsed due to fraud to avoid N&P having to sort customers into "sheep and goats" over who received poor advice.
"We will need to sort sheep and goats, and I would rather the FSCS stepped in than us try and sort out who we think we have mis-sold to."
Bullock said he would find it "puzzling" if the FSA and the FSCS failed to rule investors lost money because of internal fraud.
"What has happened here is that it has either been fraudulently or totally mismanaged by Keydata and that is a piece of work which the Serious Fraud Office is investigating.
"Our analysis of the product was that it is a very stable product," he said.
Keydata investors had this week welcomed the first preliminary ruling by the Financial Ombudsman Service (FOS) in favour of an elderly couple who were advised by an N&P IFA to invest in the failed investment vehicle.
N&P was ordered to pay £28,000 in redress, plus interest. However, the building society said it will appeal the decision, citing assurance from the FSA it will be granted a waiver to allow it to put claims on hold until the regulator decides on the issue in September.
Read the full transcript of the interview here.
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