SVS Securities - shut down?

Thrugelmir

ZingPowZing said:

Just another example of the complacency of the UK financial services industry and the poverty of expectations that keeps quiet the public in the face of situations that just would not be tolerated elsewhere. Contrast the USA where SIPC protection amounts to nearly £400k or £190k cash, with an undertaking to return to the investor the exact number of shares in his ownership.
https://www.investopedia.com/articles/investing/050515/what-happens-when-stock-broker-goes-bust.asp

Somewhat more complex a situation than you are portraying. Not the quoted investments that are the issue. It's the other dealings that SVS were up too. 

masonic

johnburman said:

The flaky middle man here was a FCA regulated broker based in the City of London who had been trading for almost 20 years who was a Member of the London Stock Exchange. And you have to use a middleman to hold an ISA.

The case of SVS is cautionary. It's pretty well known the FCA is not a competent regulator, but the dodgy practices of SVS were there to see for some years prior to its collapse, and so far the administration has proceeded unhampered by the factors that caused the company to fail. Things could have been so much worse. I was a former investor in SVS, albeit just for the overflow from my S&S ISA held elsewhere, and I never invested more than £20k there. Knowing what I know now, I'd not strike up a financial relationship with such a provider in the future.

The company went into administration in August 2019 and the new broker is said to be carrying out a due diligence exercise only now. Why... at the risk of repeating myself.. the delay? The bar date has passed... Why the delay? Come on Creditors Committee AND FCA stop the LC delay

I won't risk repeating myself, and will simply direct you to the previous instances where this has been asked and answered in detail in this thread. The correct legal process must be followed, for the benefit of all investors and creditors.

johnburman

And of course you knew of the dodgy practices and told the FCA did you? 

[Deleted User]

masonic said:

johnburman said:

The flaky middle man here was a FCA regulated broker based in the City of London who had been trading for almost 20 years who was a Member of the London Stock Exchange. And you have to use a middleman to hold an ISA.

The case of SVS is cautionary. It's pretty well known the FCA is not a competent regulator I'm all for the office being strengthened.
but the dodgy practices of SVS were there to see for some years prior to its collapse, Links please. Is there a thread to that effect on here?

  and so far the administration has proceeded unhampered by the factors that caused the company to fail. Painfully slow progress considering the numbers: - there is no suggestion that £270m worth of underlying assets were not married to under 20k individual owners at the time the administrators moved in but, if they were, access to data records should have ensured they were re-established in a day or two. From there, it could have been a priority to return holdings under £85k to their owners, since they are guaranteed. 

Things could have been so much worse. I was a former investor in SVS, albeit just for the overflow from my S&S ISA held elsewhere, and I never invested more than £20k there. Knowing what I know now, I'd not strike up a financial relationship with such a provider in the future. There are listed on the LSE website, some 90 odd FCA approved stockbrokers (SVS are one). Which names would you avoid?

masonic

johnburman said:

And of course you knew of the dodgy practices and told the FCA did you? 

Would you like me to explain what the phrases "cautionary tale" and "knowing what I know now" mean?

In answer to your questions, I knew about the pressure-selling, and marketing of the unregulated mini-bond to consumers I didn't know anything about the dodgy carbon credit trading scam and VAT theft that made the news in 2014 and again in early 2019. Knowing what I know now I would keep on top of such news, and certainly warn others about anything I discovered, but I have long given up on reporting things to the FCA. Nothing has ever been done about anything I've reported, and I've reported quite a few outright scams over the years.

masonic

ZingPowZing said:

Links please. Is there a thread to that effect on here?

https://www.reuters.com/article/uk-carbontrading-crime/four-british-men-jailed-for-role-in-eu-carbon-credit-thefts-idUKL6N0RO58020140923

https://www.cityam.com/tax-scammers-and-carbon-credits-decade/

Painfully slow progress considering the numbers: - there is no suggestion that £270m worth of underlying assets were not married to under 20k individual owners at the time the administrators moved in but, if they were, access to data records should have ensured they were re-established in a day or two. From there, it could have been a priority to return holdings under £85k to their owners, since they are guaranteed

Since you're new to this thread, I'll give you one free repeat...

Administrators can't just wade in and assume everything is in order and open up the books to interested brokers. First, they must gain access to the company's IT infrastructure and take steps to ensure this remains operational, including the retention/acquisition of any support staff needed. They would need to gain an understanding of the business in order to reduce the company's costs, while ensuring critical operations are maintained (particularly important for a Special Administration). They must take steps to safeguard assets, begin the process of reconciling those assets, liaise with regulatory bodies such as the FCA and FSCS, carry out an investigation into the affairs of the company prior to it entering administration, For individuals with high expectations, such as yourself, they need to develop a dedicated webpage and set up a phone line so that they can minimise the time they will spend distracted in 'customer support'. They would also need to identify appropriate regulated firms who might be able to take on the client assets and make initial contact with these. At the time the administrators released their statutory Report and Proposals in late September, much of this had been done or was well underway. A total of 11 interested brokers had submitted indicative offers based on unverified information. So brokers were carrying out due diligence 3 months ago. There was even some progress towards an online client portal which would allow investors to check and verify their holdings, prior to letting the first nominated broker have access to the data to complete their due diligence and make a formal offer to acquire the accounts. Naturally a bar date was required to give clients time to finalise their claims prior to the final database being offered up to the nominated broker (presumably through a second portal which protects investors from being identified personally) for the period of exclusivity. So yes, if you think LC should have just ignored its statutory requirements and spent all of its time inviting prospective brokers over for a cup of tea while they looked over the books, and those brokers could then sign up to a conditional contract the following week, I can understand why the timelines have not met with your expectations.

There are listed on the LSE website, some 90 odd FCA approved stockbrokers (SVS are one). Which names would you avoid?

I'd avoid any I haven't researched until such time as I knew a bit more about them. There are but a few I wouldn't avoid. I suggest you DYOR and take the same approach. If you are looking for a new broker, when you arrive at a potential option, you could always start a new thread and gather opinion.

[Deleted User]

What seems all too often forgotten is that this forum serves to champion the interest of the consumer rather than the narrow self-interest of  a corner of the financial services industry (in this case an administrator charging £50m to repatriate £270m to its rightful owners.
MoneySavingExpert.com's editorial independence and strategy of "helping the consumer" first shall prevail.

masonic

ZingPowZing said:

What seems all too often forgotten is that this forum serves to champion the interest of the consumer rather than the narrow self-interest of  a corner of the financial services industry (in this case an administrator charging £50m to repatriate £270m to its rightful owners.
MoneySavingExpert.com's editorial independence and strategy of "helping the consumer" first shall prevail.

Have you got a source for your figure of £50m charged in fees by the administrator? At the time of the last statutory report, they had only clocked up £771,212.80. That was over the first 6 weeks, but costs do tend to be front loaded. Even if they continued to clock up billable hours and expenses at the same rate, they'd not have managed to accrue more than £3m to date.

eskbanker

ZingPowZing said:

What seems all too often forgotten is that this forum serves to champion the interest of the consumer rather than the narrow self-interest of  a corner of the financial services industry (in this case an administrator charging £50m to repatriate £270m to its rightful owners.
MoneySavingExpert.com's editorial independence and strategy of "helping the consumer" first shall prevail.

What also seems all too often forgotten is that it doesn't particularly help consumers (or anyone else) if all posters simply started from a position that the entire industry and all within it are evil/corrupt/self-serving/<insert abusive adjective(s) of choice> and that the best way to conduct dialogue is to relentlessly and dogmatically stick to that agenda rather than to debate matters in a rounded and even manner.  Naturally there will always be bashers, and equally naturally those who highlight the flaws in their arguments will be routinely accused of defending the indefensible, but clearly 'helping the consumer' can entail educating them by explaining how things actually work, rather than blindly asserting that the customer must be right and the industry wrong - surely most can see things in more than one dimension rather than taking a narrow simplistically binary stance of 'if you're not with me you're against me'?

Eastneuk

Eskbanker. Well said.