SVS Securities - shut down?

Chaffers69

Weekly chasers to ITI have elicited this today ... nothing new and still no idea of timescale: 

"I am sorry, but we are still experiencing technical problems when creating clients’ Phoenix online trading accounts . That means that unfortunately you won’t be able to trade online at the moment. Our Management and IT team are working to resolve this problem. Please be advised that we are also having an issue with the live feed which updates the unit prices, and is being worked on by our technical support team to resolve and to make sure that your assets to become visible on the online platform. They need to perform a line by line reconciliation before and after the assets are moved onto the platform to ensure accuracy."

johnburman

Chaffers69....so why are they delaying transferring out closed ITI accounts to new brokers?   It is all much more serious/worrying than mere "technical problems".  And BTW why are you bothering to open new accounts - why not transfer out ASAP?

RasputinB

snipkin said:

why is it that "all they are doing is not providing access" is not a case against ITI?

I think the problem is quantifying the cost of loss of access.
Sure, you could argue that you were unable to trade but did that mean that you lost money?
If the platform wasn't working did you try to trade by phone?
If you couldn't by phone what other steps did you take which prove that you really would have bought or sold?
You can see that the Financial Ombudsman Service turn down lots of claims when they are on the basis of "my investment was worth £xx,xxx but it is now only worth £yy,yyy because I couldn't sell so I want compensation for the difference".
"Distress and Inconvenience" is another matter but I don't think courts normally award much. Probably better to try the FOS for that. If I get around to putting a claim in to the FOS I would be happy to post the details here so that others can use it as a template.
But what is important now is to make sure that LC put sufficient resources into getting the admin at ITI sorted and that the FCA make sure that our cash and assets are safe.
The prospect of legal action will surely motivate LC and the way to motivate the FSA is through insistence that your MP gets on the case.
If ITI Capital does stop trading then there will be quantifiable costs and legal action against LC would be more likely to be of financial benefit. I'm happy to put money towards legal advice now as I think it might encourage LC to do what they should already be doing and if they fail to rescue our assets then the legal process for action against them has already been started.

Josl said that his "request for review against LC for negligence may be difficult to prove since it is the FCA who approved appointment of ITI Capital but said they'll review if more evidence can be found against LC."

Chances are that LC didn't provide the FCA or the court with full information on ITI Capital. For example, did their submissions show how lTI was capitalised?

Josl

snipkin said:

Josl said:

johnburman said:

Anybody thought of a no win no fee firm of solicitors for a class action against ITI?

I am corresponding with an associate of a city law firm who is interested in pursuiing a class action law suit against the FCA. They think my request for review against LC for negligence may be difficult to prove since it is the FCA who approved appointment of ITI Capital but said they'll review if more evidence can be found against LC. They also think case against ITI capital is weak since all they are doing is not providing access.

Out of interest, why is it that "all they are doing is not providing access" is not a case against ITI? Surely providing access to our investments (I assume that's what you mean?) is exactly what ITI should be doing and are manifestly failing to do  - possibly deliberately as you implied in your 11.57am post.
I am not particularly interested in monetary compensation but definitely ITI should be closed down or have their LSE membership/trading licence in the UK withdrawn. And LC's conduct in the administration process must be investigated if possible. Thank you, @Josl, for all the actions you have taken as you posted earlier today at 11.45am. Let's hope some of them are taken up. Have you contacted your MP?

From legal point of view, they thought 1) it would be difficult to prove since ITI has not officially refused access/transfer request holdings. although he admitted firm is operating in grey areas but the conversation again turned to FCA for not regulating dodgy firms properly 2) even though they have used the cover for lack of resources/staff/it failures which buys them room to manoeuvre 3) law firm would be reluctant to go ahead with the case since it beats profit/reward ratio in the court.
Related to your point, if a law firm does not see monetary compensation then they would have to rely on getting their fee from our holdings which as he explained it can be as high as 40-50% including the court fees.

Josl

RasputinB said:

Chances are that LC didn't provide the FCA or the court with full information on ITI Capital. For example, did their submissions show how lTI was capitalised

Yeah, definitely. I strongly suspect that they failed to provide the fraudulent nature of ITI history to the creditors committee. FCA is already aware of it (its on their held register). It was not in the distribution plan so I am assuming, Court does not know about it either.
I carried the point with the lawyer and in IP complaint that 1) since LC had the ultimate responsibility to find a 'suitable' broker, they failed to show reasonable care in finding and appointing a broker. 2) LC explicitly apposed investors choosing their own brokers to have their holdings transferred 3) in my case they opposed having my holdings transferred back to SVS 4) their distribution plan stated us having access from 23 Jul, which has not happened. IP is investigating all these points.

RasputinB

Distribution Plan as agreed by the court "The client assets are held for approximately 11,100 clients".
Page 23 of the Joint Special Administrators' Second Progress Report (paragraph 6.1) states "we have transferred the Custody Assets and/or Client Money held by 18,359 Clients to ITI".

johnburman

IMHO, case against LC is weak.  Case against against FCA is difficult...they will say difficult balancing act etc. etc. even assuming they have a duty to us (which I doubt - they have it to society not to any one individual).

But as against ITI I think it is strong.  Negligence and breach of contract.  Non-access to assets and failure to transfer; failure to account for dividends and breach to the CASS rules must be very strong.

Josl

RasputinB said:

But what is important now is to make sure that LC put sufficient resources into getting the admin at ITI sorted and that the FCA make sure that our cash and assets are safe.

I filed a separate complaint to FCA regarding safeguarding our assets. here's some of the issues I raised in the complaint. FCA adviser forwarded all the relevant communication to a fca supervision team (supervising ITI Capital) but insisted they won't investigate individual complaints. In reply, I pointed out to FCA that almost all the investors seem to be in the same boat and mainstream print media have already highlighted these issues affecting thousands of SVS clients.

Some text from email:

I am concerned (as an investor transferred over from SVS Securities) about the way ITI Capital keeps ignoring my instructions to transfer out holdings/transfer cash to my bank account. The instructions were sent to ITI Capital on 04-Aug and have not been processed. Similar instructions were sent a dozen times since without resolution.

Barclays investments (recipient broker) have now informed me that ITI Capital have failed to pickup at least two requests of transfer sent out on the 07-Aug and 21-Aug.

Queries sent to account management and compliance dept have returned with carefully drafted replies to avoid commenting on the status/transfer of accounts and account holdings. Firm is refusing to agree to a time frame for investigation/processing requests.

This arises suspicions that ITI Capital is unable to meet the demands of investors to return cash/holdings as the financial health of the firm is poor. There is reason to believe that ITI Capital maybe abusing the nominee account system for its financial gains.

 As a regulator, I would strongly urge FCA to review ITI Capital’s nominee accounts and reassure me as an investor that funds/assets are not being traded on the LSE  under the guise of Lackof resources/IT failures AND remain intact. 

n_aftab

LC played a key part in the process, i think they could have done things better in the time they took to do their part.
From what they are saying they had a dozen brokers in the running, and most stepped out and left LC with little choice. 
That said with their auditing they should have been able to see iti were not staffed sufficiently to deal with this and where this was inevitably going to end up.

ITI are a joke, i suspect they went after all of this for the fx clients to help iti expand into fx margin trading.

I urge you all to seriously consider where you park your savings, and also be aware that iti charge a % custody fee, you will be charged the more you have invested through them. Even brokers like hargreaves don't charge for custody on their share dealing account.

RasputinB

johnburman said:

against ITI I think it is strong.  Negligence and breach of contract.  Non-access to assets and failure to transfer; failure to account for dividends and breach to the CASS rules must be very strong.

Agreed. But will ITI Capital be a going concern? There might be a great case but if there is nothing left in the pot we would get nothing.

LC have the resources to parachute an admin team into ITI Capital. They have the means to take all the client accounts back to SVS (subject to our insistence). They would also have the resources to fight any legal action but they would also think of possible damage to their reputation especially if they might have made some mistakes.