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.

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legal action

Snuff, I'm in this for seven figures so legal action is a must if it comes to it. I'm currently using the financial ombudsman to challenge my IFA advice ( having had a rebuttal from HSBC complaints ) . I have also started complaint against Prudential as like you believe the life companies have a case to answer to - i'm waiting for their final response and will initiate the Irish financial ombudsman against Prudential if necessary as they fall under their jurisdiction. If all these avenues fail, I will be looking to initiate legal action against whoever gives me the best chance of success but would be willing to join in with a class action if it was in everybodies interests. Legal action has already been initiated by approx 10 bondholders that I know of so it is possibly worthwhile waiting to see how they get on first, regards mr lynton

Posted by mr lynton on Mon, 09/02/2009 - 20:39