SVS Securities - shut down?

eskbanker

johnburman said:

Also, those still waiting for the FOS could accept the liability finding against ITI but ask for a review of the amount (quantum) of the award.

That's what Mr M did, when escalating from the initial adjudication to an actual ombudsman, but the latter didn't increase the compensation.  Having now had the final ombudsman decision, Mr M's options are take it or leave it, with no further dialogue or negotiation possible with FOS (unless referring to the independent assessor about the conduct, but not the outcome, of the case).

johnburman said:

We need a test case against the FOS

How would that work then?  A 'test case' where exactly, and on what grounds?

johnburman said:

PS:  if there is a delay in getting  a tax certificate from ITI, that merits an additional award

It's plausible that it would warrant another complaint to ITI, if it wasn't included in an earlier one, but whether that ultimately translates into financial compensation is dependent on how ITI responds to the complaint and how FOS deals with it if escalated.  If such a delay resulted in a late submission of a tax return to HMRC, and ultimately a fine, then that could be a tangible loss, although obviously there'd be an expectation of the investor mitigating losses (by using estimated figures, etc). 

RasputinB

ITI Capital’s accounts to 31 December.2020 are available from 

https://find-and-update.company-information.service.gov.uk/company/02926252/filing-history

I’ve copied some parts that I think are of interest below. Please also refer to the original accounts as I may have made errors when copying over.

Annual report and financial statements

Loss on ordinary activities before taxation 2020 £2,409,312 (2019 £2,912,600)

The Company has demonstrated considerable resilience during the global COVID pandemic and in coping with Brexit turmoil and our client retention rate remains high....

The acquisition [of] a book of business from a distressed broker in the UK added approximately 21,000 new clients and £250m of client assets to the business. As part of the ensuing migration effort we ran into a number of technical difficulties which led to some dissatisfied customers complaining directly to the FCA. As part of our dialogue with the FCA, we voluntarily agreed to certain restrictions (VREQ) until such time that these technical issues related to the clients of the distressed broker had been addressed. These included agreeing to not take on any new retail clients or clients who wish to carry out business with ITI Capital under the CASS regime. While we are still working towards addressing all these issues, we have already secured the lifting of trading restrictions on the Phoenix platform and have embarked on an extensive programme of remedial work that we believe will allow the business to move forward in the future in a much stronger position.....

Of the agreed restrictions imposed by the FCA, the Company has already secured the lifting of some, while working towards the lifting of the remaining ones by the end of the calendar year. [Restrictions still in place in 2022.] 

The Company raised additional capital of $10,000,000 in April 2021. This has and will strengthen the financial and capital position of the Company. The Directors ultimately do not consider there are causes for material uncertainty in respect of the Company's ability to continue as going concern....

Notes to the financial statements

4. Brokerage and trading activities £4,257,776 in 2020 (£2,913,127 in 2019)

Repo activities £1,572,977 in 2020 (£546,873 in 2019)

9. Average staff

The average monthly number of employees, including the directors, during the year was as follows:

Sales, marketing and support; 7 in 2020 (11 in 2019)

IT; 1 in 2020 (2 in 2019)

Trading; 4 in 2020 (7 in 2019)

Administration and management; 23 in 2020 (9 in 2019)

10. Directors' remuneration £76,895 in 2020 (£231,198 in 2019)

The highest paid director received remuneration of £68,800 (2019 - £92,204).

17. Cash at bank and in hand - client funds £74,848,934 in 2020 (£36,671,107 in 2019)

26. Related party transactions

During the year ended 31 December.2020, the Company charged ITI Group Ltd £998,247 (2019 - £282,842) in respect of fees and expense recharges.

During the year ended 31 December.2020, ITI Trade Ltd funded its brokerage account with the Company and received funds from the Company.

At 31 December 2020, the balance owed to ITI Trade Ltd was £461,127 (2019 owed by - £2,743,202).

During the year ended 31 December 2020, Open joint-stock company (''OJSC") lnvestment Company IT Invest charged the Company £73,990 (2019 - £92,526) and £186,468 (2019 - £468,633). in respect of fees and interest charges. At 31 December 2020, the balance owed by OSJC lnvestment Company was £13,423 {2019 owed to - £42;960).

During the year ended 31 December 2020, ITI Financial Solutions Limited (Cyprus) charged the Company £2,163,770 (2019 - £471,209) in respect of consultancy services provided. At 31 December 2020, the balance owed to ITI Financial Solutions Limited (Cyprus) was £6,783,780 (2019 - £3,847,501).

During the year ended 31 December 2020, ITI Digital Ltd funded Its brokerage account with the Company. At 31 December 2020, the balance owed to ITI Digital Ltd was £155,809 (2019 - £nil)

During the year ended 31 December 2020, ·ITI Technologies Ltd funded its brokerage account with the Company. At 31 December 2020, the balance owed to ITI Technologies Ltd was £54,291 (2019 - £nil).

All of the above entities [and others] are related parties by virtue of being under common control.

Key management personnel compensation

For the year ended 31 December 2020, key management personnel compensation totalled £548,137 (2019 - £507,420)

27. Events after the reporting date

On 26 April 2021, the Company issued 100 ordinary $1 shares at $100,000 per share.

28. Controlling party

The immediate and ultimate parent undertaking is ITI Group limited, an entity Incorporated in Guernsey. The registered office address of ITI Group Limited is PO Box 286, Floor 2 Trafalgar Court, Les Banques, St Peter Port, Guernsey, Channel Islands. GYl 4LY.

The largest and smallest group of undertakings for which group accounts are prepared, which include the company is that headed by ITI Group Limited.

My2penneth

They REALLY are a small organisation...and a loss making one.

"Some dissatisfied customers"......SOME!!

RasputinB

My2penneth said:

They REALLY are a small organisation...and a loss making one.

"Some dissatisfied customers"......SOME!!

and they said that "our client retention rate remains high".

Josl

The Financial Ombudsman Service Seems is offering mass blanket award of £250 for inconvenience regardless of circumstances. FOS is not fit for purpose.

eskbanker

Josl said:

The Financial Ombudsman Service Seems is offering mass blanket award of £250 for inconvenience regardless of circumstances. FOS is not fit for purpose.

They publish their compensation guidelines at https://www.financial-ombudsman.org.uk/consumers/expect/compensation-for-distress-or-inconvenience - are you contending that these guidelines are inappropriate or asserting that they're failing to act in accordance with them?

masonic

Josl said:

The Financial Ombudsman Service Seems is offering mass blanket award of £250 for inconvenience regardless of circumstances. FOS is not fit for purpose.

Clearly when a large number of very similar complaints get referred to them, where the impact/frustration is going to be broadly the same for most complainants, a consistent offer is a means of treating each instance even-handedly. It wouldn't surprise me if this consistency was also intended to convey a message to ITI that they should be offering this compensation to everyone with a reasonable complaint. This is what a well managed firm would do. If will obviously cost ITI the compensation and FOS case fee for each complaint they don't settle before it gets to the FOS (I'm assuming they've long since run out of free cases).

That's not to say there haven't been edge cases where there were more severe circumstances and greater compensation awarded. The only way one of those is going to come to light is if ITI disagrees with it, or the complainant communicates it here or elsewhere. There might have been lower awards, although hopefully the £250 represents an assumed level of distress and inconvenience, and the FOS hasn't sought to minimise anyone's experience just because they didn't make a compelling enough complaint.

My2penneth

Once again my shares have disappeared from the ITI accounts..... 

The last time they went AWOL, I reported the problem to ITI...Their answer

"Unfortunately our client portal sometimes generates inaccurate projections of client holdings, hence our management and IT team are investigating and trying to resolve this issue as soon as possible".

This has been an ongoing issue (their own words indicate it has happened previously). I wonder what the FCA thinks about this...I think I will ask them on Monday.

p.s. they are not replying to the FOS' emails.....
.

eskbanker

masonic said:
If will obviously cost ITI the compensation and FOS case fee for each complaint they don't settle before it gets to the FOS (I'm assuming they've long since run out of free cases).

Not necessarily - they get 25 free cases per financial year and they didn't feature in the most recent FOS complaint volumes dataset, which has a threshold of 30, albeit those datasets only cover half-year periods:

https://forums.moneysavingexpert.com/discussion/comment/78790224/#Comment_78790224

masonic

eskbanker said:

masonic said:
If will obviously cost ITI the compensation and FOS case fee for each complaint they don't settle before it gets to the FOS (I'm assuming they've long since run out of free cases).

Not necessarily - they get 25 free cases per financial year and they didn't feature in the most recent FOS complaint volumes dataset, which has a threshold of 30, albeit those datasets only cover half-year periods:

https://forums.moneysavingexpert.com/discussion/comment/78790224/#Comment_78790224

Thanks, I missed that post. I find it surprising, although perhaps that is the danger in extrapolating the sentiment here to ex-SVS investors in general.