The collapse of Keydata, the structured product provider, which went into administration when the FSA forced it to set aside £5M to cover the tax bill and the potential of legal action arising from products investing in life settlements raises some interesting questions wrt the role of the FSA.
Seemingly the FSA was investigating issues around Keydata's product selling for several months before it collapsed.
- What were the FSA looking for?
- Did the FSA find what they were looking for?
- Why did the investigation take so long?
- Was the investigation the cause of the collapse?
- If the FSA knew that there was a problem with a product, which may threaten the existence of the company, why did they allow the company to continue to trade that product and why did they allow the directors to continue to draw their salaries (salaries of Keydata's three directors increased eightfold in three years to just under £2 million in 2008)?
Is this another example of the FSA being asleep at the wheel?