Bloomberg News

FSA Use of E-Mails in Keydata Probe Was ‘Unlawful,’ Judge Rules

October 11, 2011

Oct. 11 (Bloomberg) -- The Financial Services Authority can’t use a pair of e-mails as part of an investigation into Keydata Investment Services Ltd., after a judge said the electronic data was covered by the attorney-client privilege.

The e-mails sent by Keydata founder Stewart Ford and other directors to legal advisers was obtained unlawfully, Judge Ian Burnett in London said today. The judicial review has forced the FSA to suspend its four-year-old investigation into Keydata, which was forced into administration in 2009.

“This episode, along with the FSA continually ignoring its own guidance and procedures in its investigation into Keydata, raises serious questions about the regulator’s own conduct,” Ford’s solicitor Harvey Knight said. He said the FSA should review its procedures in light of the ruling.

Keydata was placed under the control of administrators at PricewaterhouseCoopers LLC in June 2009 amid an FSA investigation into the company, which had managed as much as 2.8 billion pounds ($4.4 billion) before it failed. Today’s ruling is the first time an FSA-initiated probe has been the subject of a successful judicial review, Keydata said in an e-mailed statement.

FSA spokeswoman Andrea Kinnear said the judge ruled that another six e-mails weren’t covered by privilege.

“There will be a further hearing in due course to determine remedy,” she said in an e-mailed statement today.

The FSA was investigating the sale and marketing of investment products at the Reading, England-based company.

--Editors: Anthony Aarons, Peter Chapman

To contact the reporter on this story: Kit Chellel in London at

To contact the editor responsible for this story: Anthony Aarons at

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