13Apr

The Financial Conduct Authority has once again acted to ban an individual as a result of misconduct which was not related to his role in financial services. The Surrey-based independent financial adviser will be banned from carrying out any regulated activity, unless he is successful in his appeal to the Upper Tribunal. He is currently the sole director of his firm and holds the SMF3 (Executive Director), SMF16 (Compliance Oversight) and SMF17 (Money Laundering Reporting Officer) roles.

The adviser was sentenced in March 2017 to a term of 22 months’ imprisonment, suspended for 18 months, for grooming offences involving someone who he believed to be a 15-year-old girl. Having spent the six months prior to his trial in custody, this meant he walked free immediately following his sentencing.

The person he was in contact with was actually an adult woman – a member of a group of internet vigilantes – posing as a child in online communications. The FCA therefore considers that he is not a fit and proper person, that he lacks the necessary integrity and that he poses a risk to consumers and to confidence in the financial system.

It is reported that he will appeal on the grounds that he has shown remorse for his conduct and that it has no relevance to his competence as an adviser.

Megan Butler, who at the time was the FCA’s Executive Director of Supervision (Investment and Wholesale) wrote to the Chair of the House of Commons Women and Equalities Committee in September 2018 setting out the FCA’s view on sexual harassment, and how it was seen as misconduct which can drive poor culture.

Christopher Woolard, then Executive Director of Strategy and Competition at the FCA, gave a speech in December 2018 where he said “non-financial misconduct is misconduct, plain and simple”, and added “the way firms handle non-financial misconduct, including allegations of sexual misconduct, is potentially relevant to our assessment of that firm.” This was also the subject of the FCA’s Dear CEO letter in January 2020.

This is also not the first time that the FCA has taken action of this nature. In November 2020, three financial advisers were banned after they were convicted for offences relating to indecent images of children, voyeurism and sexual assault; and in 2014 a hedge fund manager was banned for repeatedly failing to pay his train fare.