"The Isle of Man failed KSFIOM depositors spectacularly"

To give credit where it is due the editor of SHELTER OFFSHORE wrote a well-balanced piece in response to criticisms he received about the way the Isle of Man was being promoted as a good place to put one's money. He said:

Recently we ran several articles on the Isle of Man and its reputation as being one of the safest and best regulated offshore jurisdictions. The storm of emails that came back to me was quite overwhelming - more importantly they weren’t of the nature that I normally receive. These weren’t emails from millionaire expatriate investors who’d fallen a few percent short of the original projections, they were from very real people who had lost their entire life savings, retirement incomes and any chance of ever getting their money back. The victims were investors and depositors at Kaupthing Singer & Friedlander, Isle of Man (KSFIOM.) So why, when over 10,000 investors and depositors have lost so much while depending on the Isle of Man’s regulation and guarantees for security, am I still saying that the Isle of Man is a safe and recommended offshore jurisdiction?

There’s no point in beating about the bush - the Isle of Man failed KSFIOM investors and depositors spectacularly, and their failure to resolve the situation quickly has indeed damaged the Isle of Man’s (IOM) reputation as a safe offshore jurisdiction.

......... There’s actually a whole catalogue of blunders that resulted in KSFIOM investors and depositors losing their savings, the IOM is partly responsible but not entirely, you can find far more information at www.ksfiomdepositors.org a site specifically created for the victims of the collapse. I personally am equally disgusted at the way this particular situation has been handled, but I won’t leave the blame totally at the gates of the IOM government when the UK government and the FSA also played an active role.

The Isle of Man government do deserve to be criticised for what happened and should be held fully to account, but the fact is that the IOM is still one of the most responsive offshore jurisdictions.........

In the final analysis because of the significant dependence on its financial services industry the IoM can not afford to dismiss depositors simply by implementing its flawed compensation scheme.

No doubt the government believes KSFIOM was a 'one-off' casualty of the international financial crisis and it is tough luck that the depositors are colateral dammage. But that is not good enough. In response to the financial crisis all European governments acted swiftly to ensure that savings in banks in their jurisdiction were safe. The UK did this where necessary by nationalising failing banks and guaranteeing the savings of UK residents who put money into KSFUK & Icesave. The IoM government has not responded in like fashion. It is a Crown dependency so it should.

Full article : here