Legal action against Bond Companies

I have KSFIOM deposits with 3 Bond Companies. As pointed out by another DAG member the IFAs who sell these Bonds can only choose investments which are approved by the relevant Bond Company, and which are recommended because they have, say, an AAA rating or similar. I believe that the DAG should consider initiating a class action against the Bond Companies involved with us. At present, as has also been pointed out in another comment, they are not communicating with us meaningfully, but will use the size of our deposits to vote on recompense options. It seems to me that the IFAs will claim they followed the investment guidelines laid down by the Bond Companies so it may not be worthwhile suing them (the IFSAs) for any shortfall in recompense via the IoM scheme or the SOA, so the better step would be to warn the Bond Companies that they are the target organisations. This would be based on at least:
1 They offered KSFIOM without clarifying the poor protection offered for bondholders by the IOM compansation scheme. Similarly they accepted deposits well in excess of this protection limit.
2 They did not review their offerings even though they should have known of the reservations on investment in Icelandic Banks expressed by financial experts up to a year ago (details are on various websites).
This action would, I feel, concentrate their minds on obtaining the very best deal from the IoM as they would know they will be challenged to "make up the difference" for depositors. It would also presumably make their inadeqaute services widely known to potential investors.
If they choose they are big enough to consider taking their own action against those who they feel are responsible for this whole situation. However they may feel that IF 65% is offered via the Depositors Protection Scheme it would be in their best interests to inject the remaining 35% or whatever rather that get involved with a class Action.
At present they seem to be having a free ride with no downside when they attend meetings.
I believe it is possible to find out how many bondholders are affected with each Bond Company. I think some of them have made statements including this information.
My questions are:
1 Can we confirm the numbers involved and obtain details of these investors?
2 Can we establish whether there is likely to be support for a class action or actions?
3 Can we indicate this possibility to them before the next Meeting on 19 Feb?
Any comments would be very welcome.

Your rating: None
    Login to post comments
Legal Action

Thanks for that Cypheath, I just feel that these Companies are being ignored by bondholder depositors in the quest for a full refund and are maintaining a low profile, to the extent that they are not telling us anything that's not already in the papers. My IFA says the Companies offered a "menu" of investments and that included KSFIoM right up to when the trouble developed. I think we need to ask them to confirm or deny this. Probably wouldn't do this unless some sort of class action was likely. Re costs, I'm not an expert but if people who miss flights and lose out on holidays can get class actions to succeed (recent news item on TV, probably on Google somewhere), then it looks like the lawyers are offering a "no win no fee" deal somewhere. I intend to follow up with the Law Company that got the holidaymakers' cash refunds and check the terms of business they offer. I'll post anything I find for DAG consideration, although it may be we need to do it without DAG, who seem to be bickering more than ever!
Thanks again for the comment.

Posted by Snuff on Mon, 09/02/2009 - 20:20