SVS Securities - shut down?

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.

Jamesram

I honestly think we are talking about very small amounts of compensation, a long way down the road, and no court action short of an injunction is going to make any difference to ITI. The Ombudsman is in reality by far the better bet for compensation. I believe the FSCS would honour any Awrad made by the ombusman ( although admittedly this would presumably also apply to a Court award of damages)

The real issue RIGHT NOW is to get our transfer requests (accurately) dealt with. Once we are all with an alternative broker we can take stock, and make any claims we wish, against whom we wish. If I see legal advice to the contrary, ie that we should bring some for m of legal claim NOW then fair enough- I would be all in I expect.

But as at this moment I personally am engaged as a pretty obnoxious keyboard warrior, making requests, demands, threats to anyone I can think of at ITI from Rahul downwards - I have invaded his LinkdIn page with certain commentary for instance- just generally making a nuisance of myself. What else can we actually DO! I have given up on my contact Pras by the way- if he sorts it, great. But I am not holding back just in case he does.

pafpcg

RasputinB said:

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".

What point are you trying to make?

Para 11 of the Court's Judgement gives the figures:
"At the date of the administrators’ appointment, on 5 August 2019, SVS had approximately 18,600 clients for which it held client assets and client money.  The client assets had an indicative valuation at that date of approximately £286 million held for approximately 11,100 clients.  Client money was in excess of £23.7 million with some smaller euro and dollar amounts of some 16,600 clients of which 7,550 have client money claims only."

The only doubts surround the precise numbers and why the numbers were not known precisely in May 2020 (nine months into the Administration).  11,100 clients held securities in the nominee accounts of SVS;  7,550 held only cash;  11,100 + 7550 = 18,650, which is close enough to the 18,359 clients transferred to ITI.  [The list of clients and their holdings* published by LC reveals only 10,851 unique clients so this may explain the apparent shortfall: 10,851+7550=18,401.]

Additional comments:

My guess is that the 7,550 cash-only clients included the SVS FX clients - I find it difficult to believe that one-third of all SVS X-O clients would be holding everything in cash!

* The list published by LC of clients and their holdings (my copy is dated 24-April-2020) shows all the (2,200) securities held by SVS on behalf of clients, complete with the ISIN (International Security Identification Number - the GBxxxxxx, USxxxxxxx etc codes).  This should have given ITI ample opportunity to check that their systems could hold and trade all the securities to be transferred.

Jamesram

I have just had a telephone  call from a Mr Chris Smith at ITI. He confirms that he will be carrying out all actions to transfer over the stocks in both  my SC Qort and Phoenix accounts to iWeb tomorrow, the positions having been agreed. No apology or explanation, but thats fine.

An hour ago I had sent  another email To Rahu Agarwal Head of Private Investors UK knowing that he had checked me out on LimkdIn after previous posts.

"To Rahul.Agarwal

Subject:Your company's disrespect dishonesty and incompetence. James Ramage ac SC36*12 and phoenix ac Master 30*4

Here you go mate- Copy of my now weekly post to your Linkdin, account for your information:

"Another weeks gone by- another week of failure by Rahul. All I am asking him to do is transfer my account away from ITI to a proper broker, iWeb. But he won't, or can't. Now he tells me my AIM listed stocks can't be traded on his "superb" platform. And still he wont respond to me. Here you are Rahul phone me on 01748 51***5, my home number. Usually in- I am a disabled pensioner. So summon up all your courage and give me  a call. !!!!!!."

I am not proud of the above. My emails did not start off in that tone on 23 July. I was very polite. But it just shows that ITI ARE perfectly capable of actioning transfers when they are so inclined. I do not believe this was a coincidence of timing- I had sent over 25 emails just in the last few days- none had been responded to. Also I was TELEPHONED (not by Rahul sadly but never mind)- that suggests it was the "phone me" invitation that was responded to. So draw your own conclusions. I am not advocating what to do- just saying what I did.

All the above pre-supposes that what Mr Smith has told me is TRUE- I will hopefully confirm that tommorow. Now I move on to my Partner's account- she was on of the chose 250 at iWeb, but !!!!!! all has happened since!

pafpcg

How much has ITI paid for SVS's clients?

From my reading of Appendix B of the August update from the Administrators, ITI paid a "non-refundable" deposit of £80,000 in January and have paid an additional £399,995 (less the £80k).  The total payment from ITI appears to me to be eventually £500,000, itemised as "Client Contracts".   (It's not clear to me if the £80k deposit is included in the £500k or is in addition.)

Anyone care to comment?  £25 per pre-transfer account?  £500 per post-transfer account?

RasputinB

pafpcg said:

What point are you trying to make?

Thanks for an explanation of the figures.

It didn’t make sense to me that the Distribution Plan referred to 11,100 clients but LC said that they transferred holdings of 18,359 clients.

Having looked again I see that the Distribution Plan applied to all Client Assets and that as you point out “on 5 August 2019, SVS had approximately 18,600 clients for which it held client assets and client money”. 

sweetsand

Contact the financial services ombudsman if you have not done so - they are slow but worth the effort. Just a basic email will do re the calls, time wasted and can't still access your money/shares/etc

snipkin

Chaffers69 said:

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."

It was recently reiterated that the Phoenix platform used by ITI is neither developed nor owned by ITI but is "a long established US product operated by Interactive Broker" (IB) [to quote.@Jamesram posted on 10 September, 9.00pm). ITI have either 'borrowed' or have an agreement with IB to use Phoenix (perhaps someone knows the actual situation with that?). So, why are ITI having 'technical problems' or issues' with Phoenix which their IT team/technical support team (the same person?) have to sort out? Are investors with IB in the US also having these problems with "creating clients’ Phoenix online trading accounts" and not able to trade online, and "having an issue with the live feed which updates the unit prices". Or are ITI simply (a) incompetent or (b) deliberately slowing down the whole process - possibly so they can use our nominee accounts for their own purposes (as has been suggested).
I note also that not only is there the need for ITI to "perform a line by line reconciliation before" but now also "after" (they didn't say this before did they?) our assets are moved onto Phoenix - playing for more time??.
Also, as @JohnBurman asks: "why are [ITI] bothering to open new accounts"? Why all this fuss about Phoenix if they are simply unable to sort out the technicalities involved?. The emphasis should be on account transferral to other brokers - which is the urgent requirement of the moment (I presume) of nearly all ex-SVS XO clients. Phoenix not so much - I certainly am not interested in using Phoenix.
Also, from other posts here today, it seems that ITI may well be in deeper sh*t with regard to their administration processes which seem pretty chaotic - apparently losing paperwork (multiple times in some cases) and/or possibly having messed up the database and not knowing accurately who owns what shares. Let's hope not...