The Financial Conduct Authority (FCA) has issued a Final Notice formally indicating that it wishes to object to a bid by Lynda Jayne Croome to purchase a 33% stake in Nottingham-based wealth management firm Ubiety Wealth Management Limited. The regulator has taken this stance owing to Ms Croome’s failure to fully disclose information regarding the circumstances of her departure from previous roles, and believes that this demonstrates her lack of integrity.
Ms Croome was previously a director and financial adviser of an unnamed firm, referred to as Firm A in the Notice, and was also an adviser at firm B. She was ultimately dismissed from both roles.
In respect of her time with Firm A, she incorrectly informed the FCA that she resigned from the role of her own volition. With regard to Firm B, she admitted having been dismissed, but played down the seriousness of her wrongdoing in communications with the FCA.
The actual reason for her dismissal from Firm B was that she signed money laundering verification certificates saying both that she had met the client and that the photographic ID provided was a true likeness, when in fact she had not met the client in question. However, Ms Croome told the FCA that her offence was simply “completing documentation incorrectly,” suggesting that her errors were administrative rather than anything that suggested misconduct.
The FCA also comments that Ms Croome failed to accurately report the date on which she became a director of Ubiety. On her application to the FCA she gave the date as June 2 2014, when evidence from Companies House shows that she was registered as a director on February 11 2014.
The FCA has a statutory objective to protect and enhance the integrity of the UK’s financial system. This objective includes an obligation to ensure that the system is not used to facilitate financial crime. In the Notice, the FCA cites this statutory objective as an additional reason for objecting to Ms Croome’s plans to acquire a stake in Ubiety.
Section 178 of the Financial Services and Markets Act 2000 says that:
“A person who decides to acquire or increase control over a UK authorised person must give the Authority notice in writing before making the acquisition.”
The Act goes on to say:
“Where the Authority receives a section 178 notice, it must determine whether to approve the acquisition to which it relates unconditionally; or propose to approve the acquisition subject to conditions, or object to the acquisition.”
Val Smith, chairman of the FCA’s regulatory transactions committee, commented:
“The issues of non-disclosure raise serious concerns in relation to the integrity of Ms Croome.”
This case illustrates the importance placed on the fitness and propriety of senior individuals at authorised firms. Additional requirements in this area will arrive when the Senior Managers & Certification Regime comes into force, which will be in March 2016 in the banking industry and in 2018 in other authorised firms. The Regime will essentially transfer the responsibility for assessing individuals’ fitness & propriety from the FCA to the firm.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.