SVS Special Administration: a Scandal in the Making

I have written previously about the collapse of brokerage SVS Securities, here: https://www.sharesoc.org/blog/insolvency-and-administration/an-update-on-svs-securities/ and here: https://www.sharesoc.org/blog/brokers/another-update-on-the-svs-special-administration/

Since my last post on this topic, things have gone from bad to worse. Not only has the transfer of assets from SVS to a new broker taken an inordinate amount of time, but the choice of broker to receive those assets seems questionable, to say the least. This debacle has been covered by press articles, here: https://citywire.co.uk/wealth-manager/news/svs-client-fury-as-new-broker-fails-to-return-278m/a1390644 and here: https://www.ftadviser.com/your-industry/2020/08/14/svs-clients-plagued-by-delays-at-new-broker/

More recently, ShareSoc has been contacted by former SVS clients who have still been unable to access their assets, more than a year since SVS’s collapse.

A firm called ITI Capital is the broker selected by the administrator, Leonard Curtis, to receive the assets of former SVS clients, and approved for that purpose by the FCA. Now, I have never heard of ITI and its principals appear to be Russian. SVS clients report that despite assurances that they would regain access to their assets by 24th July, they have still not been able to do so, nor has ITI responded to their complaints and requests.

SVS clients have written directly to the FCA, complaining about these matters. I have also written to senior FCA managers, on behalf of ShareSoc and its members, expressing concern and demanding prompt action to resolve the problems that SVS clients are still experiencing. We have also seen complaints that the client pages on ITI’s website are insecure, not using SSL encrypted protection.

The FCA is responsible for approving the transfer of assets and I find it incomprehensible that a transfer to an obscure Russian controlled broker, that seems incapable of offering acceptable service levels to SVS’s beleaguered  clients, was approved.

We have not so far had a response from the FCA and ShareSoc will seek to escalate this matter through parliamentary channels if a satisfactory resolution doesn’t occur soon.

This chain of events raises further questions about the fitness for purpose of the Special Administration Regime and about intermediation of shareholdings.

Mark Bentley, Director, ShareSoc.

12 Comments
  1. anon says:

    I am was svs customer, and can confirm that the way this has been handled has been a joke, the administrator should be fined.

  2. Alan Selwood says:

    Leonard Curtis should have the book thrown at them, or preferably sacked and fined, and prevented from being an administrator altogether.
    Then the FCA should override their decision and force all remaining transfers to be split between 4 willing major UK platforms at random, with those transferred having a free option to transfer on to any other UK-based broker of their choosing.
    Those already transferred should have their transfer rescinded and allocated as above.
    Given the inadequate state of the Russian-owned broker, this should have its licence to trade revoked forthwith.

  3. David Stredder says:

    This sounds a shocking state of affairs and it would be good to know if other brokers applied to take on the business and why exactly ITI Capital were considered fit to undertake this work if all investors have never heard of them and deadlines have clearly been broken. The FCA should be compelled to respond and all those affected need to contact their MPs to progress this matter. ShareSoc will hopefully be able to assist with a campaign.

    • Mark Bentley says:

      David – apparently there were 100 potential brokers in the frame. I can’t understand why ITI were chosen – unless they offered the best price for acquiring the client accounts to Leonard Curtis. I will be following up with the FCA if they don’t respond to my letter.

  4. MR A I MOHAMMED says:

    I am a sharesoc / signet member and have experienced all the issues with ITI mentioned.I have failed to get any acknowledgement or reply to my emails to them and also a rerecorded delivery I sent to their compliance team( if they have one).How did they get FCA approval? Is it a EU passport job? They have ignored clients and other brokers` requests,what happens if they now go insolvent due to the money they surely now wasted on acquiring ex-SVS clients as I now doubt they will be able to retain a single one. Can sharesoc also involve the Financial Ombudsman Service as it seems it the appropriate authority to handle this issue.

    • Mark Bentley says:

      Hi, The FOS is the appropriate body to resolve disputes between clients and financial services firms. In this case, I believe the problem is more fundamental and the FCA is responsible both for the authorisation of ITI and approval of the SVS Special Administration process (under supervision of the high court). Hence we are focusing our efforts with the FCA (which, in turn, is responsible to H.M Treasury) and will use parliamentary channels to increase the pressure, if necessary.

  5. M Smith says:

    6 comments but not visible in Windows Edge.

    • Mark Bentley says:

      Sorry about that – due to a technical problem. Looks like it’s resolved now. You should be able to see all comments now.

  6. MR A I MOHAMMED says:

    Thanks for the reply to my comment and clarifying the function of the FOS. Unlike others, I have actually onboarded onto ITI and now asked Iweb to transfer to them and informing ITI but I don`t know what progress has been made on that front in light of what others have gone through, I doubt we will know in the immediate future.Keep up the good work.

  7. tahir shah says:

    Yes agree with everyone. Take LC and FCA on the pannel to answer soem serious questiosn and get compensation for all this havoc.

  8. Mark Bentley says:

    I have created a new forum to discuss matters concerning the SVS insolvency here: https://www.sharesoc.org/forums/forum/svs-client-action-group/ I will post any new developments in that forum. The forum is open to all members of ShareSoc and SIGnet, who can comment on existing topics, but only full members can create new discussion topics within the forum. If you are not yet a member of ShareSoc you can join here: https://www.sharesoc.org/membership/ . Joining as a full member helps to support our costs through the modest annual membership fee of £45. Associate membership is free.

  9. Mark Bentley says:

    We have had a response to my letter from the FCA today, which I have posted in the new forum: https://www.sharesoc.org/forums/topic/response-from-the-fca/

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