SVS Securities - shut down?

johnburman

Masonic and I have had our differences but he is right albeit for the wrong reason. You can claim from the FSCS under their scheme if you suffer a loss

if you get you rshares and your divis AND FSCS pays fo rthe costs of the admin (LC)...where is your loss?

Answer I suppose your loss of interest on the divis. But you get the divis anyway at the end of the day. Now this loss of interest should be properly paid for by SVS. Not ias a breach of contract but in the law of 'conversion' or 'money had and received'. Problem. SVS is bust so no assets. so one wonders if you can claim against LC? No they are agents of SVS. so your only claim is agianst FSCS. Now at the meeting they said they will not pay such a claim....but I wonder whay not? SVS are guilty of conversion of the divis causing you a loss of interest. By their default you have suffered a loss. FSCS should pay for it (as long as you are an eligible personal and your total losses are <£85k).

Now why am I wrong?

johnburman

Should have added FSCS RULES for Investment companies are below. From their website. See para 1 - is not the loss of interest a "losses" for this purpose?

https://www.fscs.org.uk/how-we-work/terms-and-conditions/investment-payment-terms/

juliamarsh

I meant that we have been prevented from withdrawing the dividends for several months, resulting in us being unable to place the cash therefrom in an interest bearing account as we could have done had they been accessible to us.

masonic

johnburman wrote: »

Answer I suppose your loss of interest on the divis. But you get the divis anyway at the end of the day. Now this loss of interest should be properly paid for by SVS. Not ias a breach of contract but in the law of 'conversion' or 'money had and received'. Problem. SVS is bust so no assets. so one wonders if you can claim against LC? No they are agents of SVS. so your only claim is agianst FSCS. Now at the meeting they said they will not pay such a claim....but I wonder whay not? SVS are guilty of conversion of the divis causing you a loss of interest. By their default you have suffered a loss. FSCS should pay for it (as long as you are an eligible personal and your total losses are <£85k).

Now why am I wrong?

The reason you are wrong is because both SVS and LC are protected from legal action by creditors under the Insolvency Act and to have a valid claim the FSCS would pay out on, need a legally enforceable decision from the Financial Ombudsman Service. One poster in this thread has just that - from a claim they made prior to the insolvency. But the FOS will not accept complaints in relation to events that happened during an administration. There is no obligation for the FSCS to compensate anyone for claims they might have been able to bring against SVS had they not been in administration.

The above is why, when banks fail, the FSCS covers interest on standard savings accounts up to the date the firm enters administration and not beyond (for fixed term accounts, there already exists a contractual obligation to pay interest to term and this is honoured).

The fact remains, the only losses incurred during this insolvency that could be claimed from the FSCS are for assets that are used to fund the administration. If that's the "wrong reason" you refer to above, I think you are mistaken.

masonic

johnburman wrote: »

Should have added FSCS RULES for Investment companies are below. From their website. See para 1 - is not the loss of interest a "losses" for this purpose?

https://www.fscs.org.uk/how-we-work/terms-and-conditions/investment-payment-terms/

juliamarsh wrote: »

I meant that we have been prevented from withdrawing the dividends for several months, resulting in us being unable to place the cash therefrom in an interest bearing account as we could have done had they been accessible to us.

What you are describing is an opportunity cost, which is grounds for complaint. Said complaint could be escalated to the Financial Ombudsman Service or the county court if SVS weren't in Admininstration. As mentioned above, FOS decisions (from an Ombudsman) are normally covered by the FSCS, whereas a CCJ would only entitle you to submit an unsecured creditor claim for the compensation you might be awarded.

A general rule is that the FSCS pays out when a firm cannot meet an obligation to consumers. That obligation needs to be legally enforceable, either through the contract you have with the firm, or through a regulatory requirement placed on the firm. The ability to earn interest on money the company in administration happens to be holding on to does not create such an legally enforceable obligation - that's what the FOS and courts are there to do on a case by case basis.

Sailskipete

OK so this might be totally random and possibly naive thoughts on the matter but .....

SVS went into administration and by doing so have prevented me from accessing my assets and doing with them as I please. Part of this would have been to prevent or at least limit any trading loss that I may have incurred.

At the date SVS entered administration my portfolio was worth a known / determinable value lets say £65,000.

If ...... when I regain access to my assets my portfolio has reduced in value to say £55,000 then I have suffered a financial loss. I appreciate this is a "trading" loss however it is a loss that has been completely beyond my control due to the failure of SVS.

I guessing the answer is no ..... but surely FSCS compensation should cover this?

The point of compensation is to put you back into no worse situation than the same "financial" position you were at the point of failure.

Thoughts and informed views appreciated. And if anyone wants to have a good laugh then please do! :rotfl:

MK62

Ooooh....the excitement......my access code has just arrived.......got to go out now, but at least I'm closer to being reunited with my £950 fortune (I was in the process of consolidating away from SVS when they went south).....

johnburman

To Sailskipete

No. the loss was 'caused' by market decline not by the insolvency of SVS. Now you will say...but I could not sell and so i have suffrered a loss. They will say, a) how do you show you would sell [you cant] and b) if you coudl why did you not short elsewhere? Loss of interest on divis is a much better bet. Wonder if there should be some test cases, but the reality is you have to agree the comp in order to get your shares (and not pay the contirbution to LC's admin costs). No one will want to 'test' the FSCS; they will take their shares and move one.

Thought. Are the terms and conditions of the FSCS consumer fair and reasonable? Are they binding on consumers anyway? (can you accept, take your shares and then later still claim against/sue FSCS for loss of interest?)

BUT are we not counting our chickens. I have not got my code yet, but pleased someone (lucky MK62!) has let alone access to the shares. And who is the new broker (if anyone)?

pafpcg

I've accessed my account via the new portal. Surprise, surprise! - the assets displayed by the portal match exactly the statement of my SVS account sent out in September. Since the assets displayed match my records of what should have been in my SVS account on August 5th, I'll not be disputing the data.

The only issue I have is with dividends received since SVS went into administration. LC say dividends will be held in a separate bank account for clients, but when we will be able to check the amounts? Next April when the assets are released?

Danie5

I note that if you want to claim for losses due to bad advice you must go to the FSCS site and claim from them. In 2015 I was convinced by some SVS expert to invest in Atlantic Coal (ATC). Shortly thereafter ATC delisted, did very well, tried to relist without success and suddenly went bankrupt and this idiot lost his investment.
I decided to try the FSCS to compensate me a bit but even before I could apply they very quickly told me I'm out of luck.