A former non-executive director has lost her six-year battle against a ban and fine that was originally imposed by the Financial Services Authority (FSA).
She referred the original FSA decision to the Tribunal, and after being unsuccessful at this stage, she took the case to the Court of Appeal and then to the Supreme Court. The final stage of this saga came on November 27 2018, when the Supreme Court issued an order refusing her application for permission to appeal against the decision of the Court of Appeal. Hence only now, in December 2018, is the new regulator, the Financial Conduct Authority (FCA) in a position to issue its Final Notice.
The director in question has now been banned from holding the CF2 (non-executive director) position at any authorised firm and has been fined £20,000.
The individual’s failings lasted for more than four years, from January 2009 until May 2011. During this time, she was a non-executive director at two mutual societies and served as the chair of the investment committees of both firms.
At the same time, she was soliciting work from a well-known US investment manager firm, and the two mutual societies were also seeking investment manager services and were exploring various options in this regard. She did not, however, tell either mutual society that she was simultaneously seeking consultancy work with one particular investment manager, and the two mutual societies were led to believe that she was providing them with impartial advice.
The FCA says that her actions were a breach of Statement of Principle 1, which requires approved persons to act with integrity.
Mark Steward, Executive Director of Enforcement and Market Oversight of the FCA, said:
“Directors have a duty to disclose or avoid conflicts of interest so they can be addressed by the board. In this case, [name of director] placed herself in a position where her duty as a non-executive director may have conflicted with concurrent opportunities she was pursuing. This was neither disclosed nor, as a consequence, could it be addressed by the board. This was inappropriate and inconsistent with the standards of integrity expected from senior managers”.
The case serves as a reminder to all managers at all authorised firms to be aware of any conflicts of interest their activities might expose them to.
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