LONDON (Reuters) - Britain’s financial regulator has banned the former compliance officer of Keydata Investment Services, a company that went bust seven years ago in a “deathbonds” scandal in which pensioners lost millions of pounds.
The Financial Conduct Authority (FCA) said Peter Johnson has been banned from any regulated activity in Britain.
Once an award-winning company, Keydata sold products backed by second-hand U.S. life insurance policies, dubbed deathbonds, to around 30,000 mainly elderly investors, pitching them as low risk.
Johnson would have been fined 200,000 pounds were it not for evidence that this would cause him serious financial hardship, the FCA said in a statement.
The investors have received compensation up to a limit.
“The FCA has found that Mr Johnson failed to act with integrity in his role as Keydata’s Compliance Officer and misled the then Financial Services Authority (FSA) on a number of occasions,” it added.
Johnson withdrew his appeal against the watchdog in the Upper Tribunal on May 17. He could not be immediately reached for comment.
The FCA said Johnson was aware the Keydata had received professional advice that its financial promotions continued to make unclear, incorrect and misleading statements.
Johnson made “misleading representations” to regulators in two mandatory interviews, and “recklessly” failed to take adequate steps to prevent Keydata from continuing to market and sell some of its products, the FCA added.
Stewart Ford, Keydata’s Scottish founder and former chief executive, and Mark Owen, its former sales director, still have appeals lodged with the tribunal.
The FCA wants to fine Ford 75 million pounds, the biggest penalty it has ever handed to an individual.
Reporting by Huw Jones; Editing by Ruth Pitchford
Our Standards: The Thomson Reuters Trust Principles.