Financial institutions

Seems the FSC can act - when it suits them :

"An independent review of the Isle of Man Bank's investment selling practices has been ordered by the Financial Supervision Commission.

Specifically it will look at all sales since January 1, 2008 to people over the age of 70.

It follows an FSC probe into a case involving an 80-year-old with terminal throat cancer, Norman Hensher, who was sold a £500,000 Aviva pension by the bank, which he had no hope of paying back.
...

The FSC has ruled the bank's internal procedures were not followed in full during the advice and sign-off stages of the investment. ...

The Landsbanki Winding-Up Board is suing the top management of the bankrupt bank, board-members and insurers for damages caused by not stopping the bank’s operations on October 3 2008 when, according the the WUP, the bank was de facto bankrupt. In total, the WUB claims the damages amount to ISK45bn (€282m).
...

The claims are based on money going out of the bank on its last day of operation October 6 2008, in total ISK35bn (now €219m). This money went onto the accounts of MP Bank, Straumur and Landsvaki, one of Landsbanki’s own money market funds. The dates are important because this means that according to the WUB the bank was already bankrupt when the British authorities closed down the bank.

See also: http://www.icelandreview.com/icelandreview/search/news/Default.asp?ew_0_...

Update 20 Jan 2012: "More on Lansdbanki's last hours" here:
http://uti.is/2012/01/more-on-landsbankis-last-hours/

" MOVES by the UK Treasury to introduce a general anti-avoidance tax rule could impact negatively on the Isle of Man.

That’s the view of KPMG director Greg Jones who was responding to the announcement by Deputy Prime Minister Nick Clegg that he hoped there would be progress on an anti-avoidance tax rule in the Budget. ...
...

KPMG island director Greg Jones said it was by no means a foregone conclusion that we would get a general tax anti-avoidance rule (GAAR) in the near future.

But he added: ‘If we did, however, there’s no doubt that it would impact negatively on places like the Isle of Man.

‘Even if the GAAR were targeted as narrowly as the working party report recommends, in my view it would strike out a number of (what has to be admitted are) fairly contrived tax planning arrangements I am aware are promoted from the island.

‘There may be some work for tax practitioners in advising whether a particular planning idea falls within the GAAR’s scope, but on the whole I think we’d lose a certain amount of the business currently being undertaken by some niche service providers.’ "

See also Richard Murphy's blog:
"KPMG in the Isle of Man admits the island may be used for egregious tax avoidance" at
http://www.taxresearch.org.uk/Blog/2012/01/14/kpmg-in-the-isle-of-man-ad...

Six former superiors at the now defunct bank Kaupþing (Kaupthing) must pay its bankruptcy estate more than ISK 4 billion (USD 32 million, EUR 25 million), according to a court order announced yesterday. The estate’s managers are demanding that assets both in Iceland and abroad will be liquidated to cover the debt. ....

By Tony Shearer, former chief executive of Singer & Friedlander

The report states: “The FSA’s overall pre-crisis supervisory approach was inadequate with, in retrospect, an overly reactive approach and insufficient data available to supervisors to assess prudential risks fully.”

So Hector Sants, chief executive, had no idea that the whole of the FSA’s approach was flawed.

This is precisely the warning I gave to Callum McCarthy, then chairman of the FSA, in March 2005. Back then I invited him to visit Singer & Friedlander to see at first hand how the FSA regulated what I called “trivia and minutiae” and paid no regard to the possibility of “systemic failure of the banks” (which was one of only two of the FSA’s objectives).

This week the Bank of England said it had “every confidence in Hector Sants” and looked “forward to him joining us as deputy Governor in 2013”. Even today the Bank of England has no idea what happened and what the FSA is supposed to be doing. They are not the right people to regulate the banks.

Given that RBS is only one of the FSA’s failings, when will the FSA publish its reports into its failure to regulate other banks such as Kaupthing Singer & Friedlander (where depositors have lost money) and HBOS? ....

A Spanish lawyer has taken legal action against ten banks, including British bank Rothschild, for their funding of equity release schemes that have left hundreds of British pensioners at risk of losing their homes in Spain.

It represents a test case for at least 800 British pensioners across France, Spain and Portugal who bought into equity release schemes in the belief that by remortgaging their properties and allowing the money to be invested offshore, their children's inheritance tax liability would be mitigated while they would receive a lump sum and a regular investment return to cover the new mortgage. ...
...
While Guernsey-based NM Rothschild & Sons accepts it provided loans to a number of pensioners to fund the remortgaging of their homes and the investment in offshore funds, it has distanced itself from the advisors who brokered the equity release schemes.

A spokesman for Rothschild said: “Rothschild is confident that the Spanish courts will agree that there has been no wrongdoing on its part in relation to allegations being made against a number of banks by a lawyer in Spain.

"Whilst Rothschild has previously provided loans to a number of Spanish property owners its role was as a lender only. The bank had no part in providing investment or tax advice to borrowers. The borrowers were advised by their IFAs in Spain, who received no commission from the bank.”

Hreidar Már Sigurdsson, who was CEO of Icelandic bank Kaupthing when it collapsed in 2008, was called in for questioning in relation to the investigation of the so-called Al-Thani case last week, according to the sources of mbl.is.
....
Ruv.is reports that the Icelandic Special Prosecutor’s Office is currently investigating more than 200 cases, ten of which are expected to be completed before the end of this year. ...

The safety of their money is once more weighing heavily on the minds of savers as the world’s banking system struggles to accommodate the write-offs announced in last week’s do-or-die eurozone deal. ....
.....

There are also dangers closer to home. ‘Offshore’ savings providers, typically divisions of mainstream UK firms based in the Channel Islands or the Isle of Man, are not covered by Britain’s Financial Services Compensation Scheme. Instead they must rely on local schemes that tend to be more complex, less generous and, possibly, less reliable.

The Jersey and Guernsey schemes, for example, cover deposits up to £50,000. But a complex overall ‘cap’ of £100 million, which cannot be exceeded in any five-year period, applies on top of a saver’s £50,000 limit. The Isle of Man applies a higher, £200 million cap. Theoretically, these caps could reduce savers’ compensation to nothing.

On the £50,000 limit, a spokesman for the Jersey scheme says: ‘We will move to a higher limit if Guernsey and the Isle of Man move, but we do not believe in differing standards between finance centres.’

The banking sector on the island shrunk by almost a quarter in the period between 2009 and 2010, according to official figures.

The Isle of Man treasury report said the down turn is a consequence of the global financial crisis.

Despite this, the figures also show an overall growth in the island's economy for the twenty-seventh successive year.

The GDP, an indication of the island's prosperity, increased by 2.1% during the stated time period.

The fastest growing industry in the Isle of Man between 2009-2011 was the e-gaming sector which showed a growth rate of almost 40%.

Despite the banking slump, the finance sector continues to be the island's biggest earner, accounting for 34% of the total income.

Manufacturing has also grown above the national average and now contributes about 5% of the island's total income.

"Much business restructuring was necessary following the numerous bank failures and the restructuring community has been waiting several years for today’s legal clarification delivered by the Supreme Court in Kaupthing Singer & Friedlander (in administration) and in the matter of the Insolvency Act 1986 (see judgment).

The case looks directly at whether the rule established in Cherry v Boultbee back in 1839 is compatible with the Insolvency Act (1986) and whether that could be applied to a case being pursued by HSBC against Kaupthing Singer & Friedlander (KSF), which is in administration.
..."

Complicated stuff, but it seems the Court of Appeal overturned an earlier decision in favour of that KSFUK. Not sure I understand it, or what it might mean, if anything, for us.