The Financial Services Compensation Scheme (FSCS) could be forced to pay out to hundreds of investors who lost money in Keydata, not just through ISAs, in light of evidence directors knew as early as 2005 their promotional literature was "misleading" and "inaccurate".
In a document seen by Professional Adviser and dated 22 November 2005, lawyers Norton Rose tell Keydata’s directors its promotional literature for the Secure Income Bonds (SIB) failed to meet FSA requirements. Currently, the FSCS needs non-ISA investors to prove Keydata created a civil liability towards them in particular and they are reviewing claims on a “case by case” basis. But the FSCS could now be forced to accept a case of blanket civil liability against Keydata, because the firm ignored legal advice in respect of misrepresentation in documents used for all SIBs 1-3 investors. ...
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