An action group representing hundreds of Keydata investors has called on the Financial Services Compensation Scheme (FSCS) to back its litigation against the multi-national firms which acted on the SLS Capital and Life Settlement Capital Bond Schemes.
KSLIT, which represents hundreds of investors in SLS-backed Keydata policies, said it has submitted a 230-page document to the FSCS with a request to join in and jointly fund it alongside investors, who have already contributed 1% of their investments.
Among the businesses being pursued are "recognisable, international institutional and advisory brands", including accountants, auditors, lawyers and banks.
Tony Lahert chairman of KSLIT said: "The FSCS has been under pressure from the IMA and elsewhere to take action to recover levy payments. KSLIT's door is open to the FSCS but it cannot expect a free ride.
"It must, and the financial services community surely expects it to, match the contributions of KSLIT's members so that those responsible for this fiasco, the ‘real miscreants', are brought to justice and made to pay."
KSLIT said its legal investigation has been ongoing since last summer, stretching as far as the US, where the life settlement policies were bought and then sold off, and added the FSCS would benefit from any recovered losses.
Lahert said the investigation should be completed by late autumn and will almost certainly lead to litigation in Luxembourg, the UK and the US.
Despite the FSCS's ongoing pursuit of financial advisers who sold the products, Lahert, who had personally invested £250,000, said he was not interested in chasing them for any money.
He said: "I think they were also victims of it and, although there are probably IFAs who acted very poorly, there are also IFAs who acted well and endeavoured to do the right thing."
Luxembourg-based life settlement vehicle SLS Capital collapsed with some £103m of investors' money after it emerged £20m had been stolen from the fund sometime in 2008.
This was part of the reason Keydata, which invested money in SLS, was put into administration in June 2009.
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019