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Lifemark paid 10% commission to Ford’s offshore company
by Iain Martin on Jun 14, 2010 at 09:00
The accounts for Lifemark from December 2008 recorded LAS Global as a creditor with £1.6 million owed to the BVI registered company. The Lifemark accounts also notes Keydata Investment Services was owed £410,000 as a creditor.
The accounts do not disclose the full size of the total fees and commission paid out of Lifemark, which totalled £59 million according to the document, which had been prepared by Lifemark’s trustees and the provisional administrator Eric Collard of KPMG.
Adviser shock
Financial adviser Harry Katz said he was shocked to discover that 10% of investor’s funds had been paid to LAS Global and that this had not been disclosed to him. ‘So you have got a firm dealing in huge amounts of money where the principal is not even UK resident,’ said Katz, director of Norwest Consultants. ‘All of a sudden there is this extra deal. If I had know about this I would not touched this with a barge pole.’
Lifemark was put into provisional administration by the Luxembourg financial regulator in November and its bonds were suspended from the Luxembourg Stock Exchange in February due to liquidity concerns.
Lifemark stopped making income payments to investors around the same time in order to preserve its capital to pay premiums on its assets, second hand life insurance policies. The value of the life insurance policies, which generate returns for investors when the individuals insured die, will be lost if premiums cannot be maintained.
Ford blames FSA
Ford claimed that Lifemark was in financial difficulties because of the intervention of the Financial Services Authority in June 2009. The FSA put Keydata into administration over a tax liability incurred from a different life settlement product.
‘Lifemark is in financial difficulty because of the interventions of the regulators and their agents since the summer of 2009,’ stated Irvine on the behalf of Ford. ‘This has resulted in the business plan and financial projections of Lifemark being completely overturned. It is in these circumstances that the severe liquidity problems since November 2009 have arisen.’
Lifemark was understood to have secured £3.5 million of funding from hedge fund CarVal Investors which could lead to a £40 million restructuring deal. Ford claimed that the CarVal plan would be a bad deal for Lifemark investors.
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4 comments so far. Why not have your say?
Harry K
Jun 19, 2010 at 10:50
And still the FSA are mute. They are passing the parcel faster than at an Afghan birthday party. It ain't us it's the FSCS. The FSCS a playing sillly buggers and the system rewards procrastination - the longer it takes the bigger PWC's pay packet. (And all the other apparatchiks).
report thisAnonymous 1 needed this 'off the record'
Jun 19, 2010 at 11:32
When are the FSA going to get their act together ? Lifemark, Keydata, Arch Cru, NDF - not to mention a platoon of banks - all somehow slipped through the net. As you say, Harry, it seems another case of ' not our fault, guv '.
Overpaid, underperforming, full of their own importance - England's World Cup team ? Yes. The FSA ? Yes.
report thisAnonymous 2 needed this 'off the record'
Jun 19, 2010 at 11:56
What is needed is a name change for the FSA who can then all wear new hats and the new named regulator can start again with a clean sheet.
First priority is to pay them all off with a golden handshake.
The following day you then need to re-employ them all in their new jobs at a much higher salary of course.This in order to attract the right sort of competent professionals just like they had before.
The compulsory golden hello payment will be needed without saying.
They can then get down to the job of blaming IFAs for everything in hindsight that has gone wrong, including paying for dodgy companies like Key data that most IFAs didnt touch with a barge pole
I shall look forward to getting lots more bills as its obviously all my fault
report thisPeter Hilton
Jun 20, 2010 at 16:24
Keydata (AKA - Stewart Ford) was awarded accolades and awards by his UK peers in 2005, 2006,2007 and 2008. (so don't blame it all on the FSA)
First he "lost" £100M of UK savings, but didn't tell anyone - then he sent my savings overseas, along with another £350M (to another company he owned - forgot to tell me about that)) and then paid himself £40M up front in undeclared "fees" (in addition to the £30M declared fees) from that offshore company he owned to another offshore company he owned. and selected and "valued" the assets he bought for me using another offshore company he owned. But all this occurred outside the FSAs sphere of influence - so it seems no compensation needs to be paid. Also Stewart says there actually were not any problems at all until the FSA and the CSSF stuck their bargepoles in. He was running the whole show - so he should know. And he was an Approved Person subject to the FSAs APER code of behaviour.
There seems to be a little matter of multiple undeclared Conflicts of Interest to be resolved here. The SFO will sort it out when they have finished their tea.
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