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There are a number of reasons why £450M of our savings was lost. Recent requests under the Freedom of Information Act have thrown new light on the FSA's role in this disaster and their apparent attempts to divert attention away from their failings.
The FSA is not alone in the dock, of course.
We did have a lot of people making themselves very rich indeed by taking large chunks of our savings in apparently quite legal but undisclosed fees, commissions and all manner of other means of excessive self enrichment.
We even had some people simply stealing from us.
We also had a situation where the intermediaries (IFAs) might have asked a few questions much earlier - like "Can I see the the bond prospectus please... ?" and "How much real asset value does the fund I am about to recommend actually have?" and then "Does it have any chance of actually delivering what it promises?"
BUT the FSA had the duty to protect us from this sort of thing - and likes to tell us it did everything possible to do so. We have been told persistently that "We acted as soon as we were aware ....." and that everything which could have been done was done.
We now know - from targeted Freedom of Information Act requests - that these statements are just not true - at least for the last 14 months of the life of Keydata - and perhaps longer (there is an outstanding FoIA request on that) - when risk averse investors were pumping their savings into Keydata life settlement Plans at an unprecedented rate.
The FSA was fully aware of the real risks in the Life Settlement sector much earlier than they have admitted.
From the Spring of 2008 - and possibly earlier - in an extensive and detailed internal review:
They cannot excuse themselves for this sort of gross negligence by saying - "We had an investigation into Keydata and its directors underway - and our findings had to be kept confidential".
They might try to say that. They have indeed said that many times and they continue to say that - but it is not true.
That is because the review in which all the above was discovered - and internally documented - was into the Life Settlement Product Sector - it was a generic review not specific to Keydata - it cannot in any away be classed as confidential. These findings could and should have been published as soon as the FSA became aware of these matters.
But they decided to do nothing. It says so -in the report.
Our Members of Parliament need to be made aware of these facts - and need to be encouraged take action to ensure that a full and thorough investigation is carried out into the entire Keydata affair - specifically to include the role of the FSA in allowing this to develop in the disastous manner in which it did.
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