SVS Securities - shut down?

samuzza

ascension92
Who did you speak to at LSE? Do you have a phone number?

I've just checked the portal and realised I've got another unsettled trade, but I have had no communication from SVS/LC, LSE or the third party.

So I need to find out who the trade was with.

The money for the shares is back in my cash balance, but I'm missing the £7.95 SVS commission. Is this the case for anyone else?


Cheers

t237

I've recently discovered that my mother was a customer of SVS Securities and was taken advantage of by their sales people, in a possibly fraudulent manner.

She put some money in a share account on the basis that she wanted to invest in low risk blue-chip type shares, and when she was cold called by SVS she explained her position, explaining that she wanted to buy low risk bonds and shares.

She was offered to buy bonds in a company called Corporate Finance Bonds Limited Series 5, and when she asked if this was a safe investment they told her she'd get guaranteed interest on it and it was very safe.

I had a look at the prospectus for this company and it says it's only to be targeted at experienced investors. She's not financially educated at all. She received her statement from the administrators a month ago and it doesn't show any interest being credited to her account even though interest was payable on a six monthly basis, and the website of the issuer is down and as far as I can tell those bond have been de-listed. She was also offered shares in an AIM listed mining company which SVS also took money from her account to buy - this company seems to still be trading.

The publication from the administrator specifically mentions Corporate Finance Bonds Limited as one of the reasons the FCA's intervention as there was corruption between SVS and the issuers of this bond. I can't tell if this bond is still trading anywhere or if it has any value at all, but my mother paid £3000 for those bonds, which SVS took directly from her account following the phone conversation where they pushed them onto her.

Does anyone have any advice on whether there is any recourse available to her? It sounds like fraud or mis-selling to me and I think this needs to be communicated to the administrators but I am not sure what the best course of action is.

ascension92

samuzza wrote: »

ascension92
Who did you speak to at LSE? Do you have a phone number?

I've just checked the portal and realised I've got another unsettled trade, but I have had no communication from SVS/LC, LSE or the third party.

So I need to find out who the trade was with.

The money for the shares is back in my cash balance, but I'm missing the £7.95 SVS commission. Is this the case for anyone else?


Cheers

I am sorry I cannot give you the name & number of the person I spoke with, I have not been authorised but if you ring the LSE exchange 02077971000 and explain I would hope you would be put through to someone who could help. If I can I will monitor this thread and help if possible, I have had a 2nd family bereavement which I am now trying to organise. Sorry, but best of luck to you

masonic

t237 wrote: »

I had a look at the prospectus for this company and it says it's only to be targeted at experienced investors. She's not financially educated at all. She received her statement from the administrators a month ago and it doesn't show any interest being credited to her account even though interest was payable on a six monthly basis, and the website of the issuer is down and as far as I can tell those bond have been de-listed. She was also offered shares in an AIM listed mining company which SVS also took money from her account to buy - this company seems to still be trading.

The publication from the administrator specifically mentions Corporate Finance Bonds Limited as one of the reasons the FCA's intervention as there was corruption between SVS and the issuers of this bond. I can't tell if this bond is still trading anywhere or if it has any value at all, but my mother paid £3000 for those bonds, which SVS took directly from her account following the phone conversation where they pushed them onto her.

I believe this is the bond (although there might be other issues): https://www.londonstockexchange.com/exchange/prices-and-markets/debt-securities/company-summary/GB00BD3H4G23GBGBPEXED.html?ds=1
http://www.corporatefinancebonds.com/admin/resources/cfbl-bond-series-8-general.pdf

It has a zero coupon, so there is no interest during the term. It was sold at a discount with a maturity price of £1, so there are no return during the term and instead capital growth at maturity (if it repays). It's secured against the assets of the issuing company (CFBL). This looks to be the charge:
https://beta.companieshouse.gov.uk/company/09631413/charges/zYx8H1XlWFroYZGl9evPQVQm7pk
That doesn't mean that there are sufficient assets within the company to settle the debt.

Does anyone have any advice on whether there is any recourse available to her? It sounds like fraud or mis-selling to me and I think this needs to be communicated to the administrators but I am not sure what the best course of action is.

SVS had two arms to the business, and her ability to get redress will depend on which arm she was dealing with.

If she had signed up to the Discretionary Portfolio Management service, then SVS were providing here with regulated financial advice, so she could eventually make a claim to the FSCS if she suffers a loss as a result of advice that put her into investments that were unsuitable for someone in her circumstances. I don't think the FSCS is currently accepting claims from advisory clients of SVS.

If she was an Execution Only client, then she wouldn't have the above recourse, unless she has evidence of her communications with SVS which could be reasonably taken to cross the line from a mere suggestion or general recommendation to personal advice. Presuming she has no evidence of this, then as an execution only client, she would undertake that she would make her own assessment as to the suitability of any investment she made or consult her financial adviser if she was unsure as to an investment's suitability (of course if she did discuss her investment with her financial adviser, she could claim compensation from that adviser).

She could get legal advice with a view to pursuing a claim against the company in administration, but there is unlikely to be any money in the business to settle such claims. She could also raise the matter with her MP when this election is finally over.

The administrators and the FCA are already investigating the affairs of the company, and will be aware of the issues you raise, so there probably isn't any value in raising the matter with them at this stage.

englishmas

Hi Masonic
My understanding is that FSCS will only deal with the losses occurs due to the SVS going to administration, not the losses due to bad advice.Also one cannot go to FCA anymore as the SVS in administration. Please correct me if I misunderstood the FCA regulations. Thanks

NZPK

I emailed and received a reply with code shortly after. Logged in and took care of what I needed to do.

Then today, the very next day, the letter with code arrived in the post.

All good. I've registered my claim position now.

Cheers

masonic

englishmas wrote: »

Hi Masonic
My understanding is that FSCS will only deal with the losses occurs due to the SVS going to administration, not the losses due to bad advice.Also one cannot go to FCA anymore as the SVS in administration. Please correct me if I misunderstood the FCA regulations. Thanks

The FSCS will generally cover compensation for losses that occur as a result of bad advice. It needs to be actual regulated financial advice (not just investment ideas or general recommendations), so if you used their DPM service you'd be covered, but if you used their XO service you wouldn't. See https://www.fscs.org.uk/what-we-cover/investments/
"If your claim is about negligent advice, the advice must have been given on or after 28 August 1988, the firm must have been authorised at the time, and you must have lost money after acting on the advice you were given"

and https://www.fscs.org.uk/failed-firms/beaufort/ for a recent example.
Update on 21st May reads "Negligence claims made against Beaufort Securities Ltd (BSL), relating to the firm’s discretionary fund management and advisory stockbroking activities have now been moved to our claims processing teams for assessment. As communicated in our 14 April update, we anticipate completing the majority of claims by the end of August."

The FCA does not consider individual complaints about a firm, so there was never an opportunity to go to the FCA. You could and still can provide information to the FCA about the misconduct of a firm that might might be useful as part of its investigation.

Malthusian

masonic wrote: »

If she was an Execution Only client, then she wouldn't have the above recourse, unless she has evidence of her communications with SVS which could be reasonably taken to cross the line from a mere suggestion or general recommendation to personal advice. Presuming she has no evidence of this, then as an execution only client, she would undertake that she would make her own assessment as to the suitability of any investment she made or consult her financial adviser if she was unsure as to an investment's suitability (of course if she did discuss her investment with her financial adviser, she could claim compensation from that adviser).

"Execution only" is not a get out of jail free card and this has been the case for years.

If someone from SVS rang her up and persuaded her to invest in CFB then it isn't execution only. For it to be X-O it would have to be entirely her own impulse, which it clearly wasn't.

She should make a formal complaint to SVS that she was badly advised to invest in CFB. If they fail to provide redress within eight weeks she should take the complaint to the Financial Ombudsman. If the FSCS is not yet accepting claims of this nature then this is still the procedure to follow.

She does not necessarily need evidence of the phone call where she was advised to invest in CFB. If it goes to the FOS or the FSCS they will make a decision based on what's fair and reasonable. It's not "guilty beyond reasonable doubt".

She does not need legal advice; this is a straightforward procedure.

masonic

Malthusian wrote: »

"Execution only" is not a get out of jail free card and this has been the case for years.

If someone from SVS rang her up and persuaded her to invest in CFB then it isn't execution only. For it to be X-O it would have to be entirely her own impulse, which it clearly wasn't.

She should make a formal complaint to SVS that she was badly advised to invest in CFB. If they fail to provide redress within eight weeks she should take the complaint to the Financial Ombudsman. If the FSCS is not yet accepting claims of this nature then this is still the procedure to follow.

She does not necessarily need evidence of the phone call where she was advised to invest in CFB. If it goes to the FOS or the FSCS they will make a decision based on what's fair and reasonable. It's not "guilty beyond reasonable doubt".

She does not need legal advice; this is a straightforward procedure.

Thanks Malthusian, if that's the case then I think a lot of investors could take this course of action as SVS was phoning up pretty much all of their XO clients and trying to persuade them to invest in things they wouldn't have otherwise considered. I know someone in this boat who was tempted into a number of investments in commodities startups (that have all subsequently crashed in value) despite my warnings not to listen to their suggestions. Their tactic in that instance seemed to be simply to get their customers trading more frequently (as they were not getting any custody fees from those customers).

NZPK

Are we any closer to knowing what broker/platform we are all getting migrated to? Do we even know the last 2/3 candidates?