Ford and Owen v FCA

Legal Case Summary

Stewart Owen Ford and Mark John Owen v The Financial Authority [2015] UKUT 0405 (TCC)

The case concerns the regulatory action taken by the Financial Conduct Authority (FCA) against two defendants for their role in the failure of Keydata Investment Services Ltd.

Also known as: Steve Owen Ford v FCA, Mark John Owen v FCA

Facts

In 2014, the FCA took disciplinary action against Stewart Ford and Mark Owen, senior officials of Keydata Investment Services (Keydata). Keydata was originally involved in the production, distribution and management of structured products before its insolvency in June 2009. It was revealed that the firm had marketed Secure Income Bonds – products based on life insurance policies – by describing them as being ‘guaranteed’ or ‘secure’, which was misleading. Instead, these bonds were risky and were not compliant with the FCA’s financial promotion rules. Furthermore, Ford and Owen were found to be personally involved in such transgressions, breaching several principles of the Financial Services and Markets Act 2000 (FSMA).

Issue(s)

The main issue concerned Ford and Owen's roles in the breach of FCA rules, specifically whether their conduct fell far below what could reasonably be expected of them in their respective roles. It was argued that their actions were dishonest, for which the FCA sought to impose financial penalties.

Direction/Outcome

The Financial Services and Markets Tribunal (FSMT) found that both Ford and Owen had indeed breached the FSMA principles and their responsibilities as senior officials of Keydata. They were held personally accountable and liable for the misleading financial promotions and the failure to act in line with FCA rules. The Tribunal held that Ford and Owen had acted dishonestly and without integrity. Consequently, Ford was fined £75 million and Owen was fined £4 million by the FCA, representing one of the most severe penalties ever imposed by the regulator.

References

• Financial Services and Markets Act 2000. (2000, c.8). London: The Stationery Office.
• ‘Keydata boss and sales director hit with FCA ban and fine’ (2015) 11 Compliance Monitor 5.
• ‘The Financial Conduct Authority 2014/2015 - The Upper Tribunal (Tax and Chancery Chamber)’ [2015] UKUT 0405 (TCC).