10Aug

The Financial Conduct Authority has confirmed an outright ban on a former firm director. He will now be unable to carry out any role within an authorised firm.

The individual initially indicated that he would appeal the FCA ruling to the Tribunal but has since withdrawn this appeal.

The banning order was certainly expected after the individual was convicted of four counts of fraud, for which he was sentenced to 12 months’ imprisonment – suspended for two years – and required to complete 80 hours of community service. His fraudulent activities deprived creditors of £150,000 due to them and the court accepted that he committed the fraud in order to keep his businesses solvent, rather than being motivated by greed. This fraud related to the individual’s second firm – a firm which was not regulated by the FCA.

However, authorised firms would do well to note the other issues that the FCA identified relating to the individual’s conduct and the weaknesses identified with the way he managed his firm.

Firstly, he failed to ensure that his former firm had an approved Compliance Officer and Money Laundering Reporting Officer for the period commencing in 2015; and did not notify the FCA that an unapproved person was carrying out these roles instead.

Secondly, he was disqualified as a director for a nine-year period by the Insolvency Service in March 2016 but continued to act as a ‘de facto’ director of the firm, which means that the duties he was carrying out after his disqualification were similar to those a director would normally perform.

Additionally, the FCA says he failed to notify them of matters which would have had an impact on his fitness and propriety. These were:

  • Being declared bankrupt
  • Being disqualified as a company director
  • Being the subject of a criminal investigation
  • Being charged with criminal offences

Finally, the FCA says he also provided misleading information to the regulator. This came in February 2018, when he submitted an organisational chart which showed him as the firm’s director, even though he had been disqualified from carrying out this role by this time.

The FCA’s Final Notice says:

“His conviction for offences involving fraudulent transactions demonstrates a clear and serious lack of honesty and integrity, and his continued failure to act honestly and with integrity in relation to his regulatory obligations towards the Authority further establishes his lack of fitness and propriety in the years following the commission of the offences.”