SVS Securities - shut down?

eskbanker

johnburman said:

The actions of ITI have caused their clients loss.

If customers have suffered actual losses then it's incumbent on them to quantify these when complaining to ITI and escalating to FOS - note that in the above case the ombudsman says "Whilst I note what Mr M says about luck and appreciation of his investments, he isn’t automatically entitled to compensation if he hasn’t suffered a financial loss, even if the business has made a mistake. In other words, he’s not entitled to compensation for losses that he hasn’t suffered, even if the business hasn’t been able to provide a reasonable service".

Note also that Mr M tried to run a 'time recharge' argument similar to what I think you've suggested previously ("Given everything that’s happened, in order to resolve the matter, he’d like the compensation increased to at least £550.  He’s spent at least two days on this case and the compensation would be equivalent to two days’ income") but this was rejected by the ombudsman ("Despite what Mr M says, this [£250] isn’t a payment based on his daily rate of income").

johnburman said:

ITI CLIENTS SHOULD NOT ACCEPT LESS and if iti won't pay more COMPLAIN TO THE FOS. 

Do you think it'll help if they complain in SHOUTY CAPITALS?

johnburman

NO but it will draw people's attention to the salient points. Hopefully. 

But what you say is wholly correct? It is very difficult to establish a 'proper' measure of damages when you can't calculate actual loss in pounds and pence. Thus you only get 250 to 300 GBP for inconvenience. My views I have expressed earlier... This low measure is an encouragement to ITI not to deal with complaints properly. Why bother? Say nothing do nothing and then cough up a few quid to the FOS for fees and 300 to an ex client.

This is why I want the county court to determine damages. But nobody, including myself, has brought an action and instead gone to the FOS. (which is free for complainants) 

eskbanker

johnburman said:

It is very difficult to establish a 'proper' measure of damages when you can't calculate actual loss in pounds and pence. Thus you only get 250 to 300 GBP for inconvenience.

Yes, it's clear from the FOS decision that (if seeking more than their standard inconvenience payment) complainants do need to quantify losses for which ITI can reasonably be held liable, and that spending lots of time chasing them isn't in itself sufficient.  Maybe others will have made a better job of it than Mr M?

johnburman said:

This is why I want the county court to determine damages. But nobody, including myself, has brought an action and instead gone to the FOS. (which is free for complainants) 

If you really believe that a court would award higher costs than FOS and want to see this happen, then why haven't you put your money where your mouth is and tested that theory?  As expressed previously, I can't imagine that a court would be more generous than FOS for intangible losses but there's only one way to find out and nobody else seems to feel as strongly as you about that prospect!  Perhaps Mr M will have rejected the FOS decision and is planning to take his chances elsewhere....

johnburman

Good Point ESKBANKER.   I started the FOS complaint very early on thinking it would take 6 months max to deal i.e. it would be quicker than the county court small claims track.  I was wrong.

But has anyone gone to the county court...and any quantum of damages discussed there?

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.  £250 - 300 is too low for all the amount o trauma that we have been through (including shares going 'missing' and then being found again).

We need a test case against the FOS

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

johnburman

NOTE FYI:  Dated 14 January 2022.  This is on the FCA Register for ITI Capital.  Check the site here https://register.fca.org.uk/s/firm?id=001b000000MfGkrAAF#what-can-this-firm-do-restrictions

Pursuant to section 55L(5) of the Act with immediate effect. For the avoidance of doubt, this is a voluntary requirement (“VREQ”) on ITI’s permissions under Part 4A (subsection 55L(5)) of the Act).

Requirements Regulated activities

1. ITI will not accept, without the prior written consent of the Authority, any new monies or assets from existing clients. This includes monies or assets under the client assets regime, title transfer collateral arrangements, or otherwise.

For the avoidance of doubt, ITI may continue to hold client money and safeguard and administer custody assets held as at the date of these Requirements.

2. Except as provided for in paragraph 3, ITI will not onboard, without the prior written consent of the Authority, any new clients.

3. Paragraph 2 does not apply to the onboarding of former SVS Securities Plc clients transferred to ITI in accordance with the APA entered into by ITI

5. Paragraph 1 does not apply to the acceptance of monies or assets from existing clients by ITI as a result of, or in relation to, the following:

a) Existing clients trading existing money and/or assets on all platforms as detailed within ITI’s VREQ variation request letter dated 13 August 2021 and 29 September 2021;

b) Receipt of dividends or coupons;

c) Rights issues;

d) Corporate actions including maturing bonds;

e) Settlement of trades instructed but not yet settled as at the date of the Requirements; and

f) Margin calls and movements associated with open trades and positions.

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.