The Upper Tribunal today published a decision giving reasons for refusing the Authority’s application for a “split trial” of the conjoined references of Stewart Ford (the former CEO), Mark Owen (the former FD) and Peter Johnson (the former compliance officer) arising out of the failure of Keydata Investment Services Limited (“Keydata”). Keydata was involved with certain investment products underpinned by bonds issued by two special purpose vehicles incorporated in Luxembourg, SLS Capital SA and Lifemark SA (“Lifemark”). The Luxembourg regulator (the CSSF) closed Lifemark to new business in mid-2009, and it was put into liquidation on 11 May 2012. Keydata ceased trading in June 2009 and went into administration. The Decision Notices, which are now the subject of these references, record the findings of the Authority that each of the applicants had failed to meet minimum integrity and competence standards, by being in breach of Statements of Principle 1 (integrity) and 4 (relations with regulators). Each applicant was made the subject of a prohibition order and a financial penalty was imposed, on Mr Ford of £75 million, on Mr Owen £4 million and on Mr Johnson £200,000.
The Authority sought a split trial the effect of which, the Judge held, was to stay the issue of the appropriate sanction to be determine by the Tribunal (if any) until after the conclusion of parallel Commercial Court proceedings brought by assignees of Mr. Ford and by Mr. Owen against the Authority for among other things misfeasance in public office. Judge Roger Berner refused the Authority’s application on the grounds that there was no overlap between the two sets of proceedings such as would justify a stay of any element of the Tribunal proceedings. In so doing the Judge made the following general observation: “I do not accept that there is any discernible principle whereby proceedings in this Tribunal might as a general rule be dealt with by means of a split trial, at least in which one element of the proceedings is stayed pending determination of other proceedings.”
The decision is another example of the increasing interplay between regulatory and commercial proceedings in the financial services arena.
The Judge also refused specific disclosure applications made by Mr. Ford and Mr Owen.
The decision can be found here.