Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FCA told it can ‘fundamentally’ change decision grounds after the fact

FCA told it can ‘fundamentally’ change decision grounds after the fact

A court has ruled that the Financial Conduct Authority (FCA) was entitled to uphold a ban on an individual despite ‘fundamentally’ changing the grounds for its decision.

The FCA originally declared insurance broker Stephen Allen not a fit and proper person to carry out any regulated activity over claims that he had ‘secretly added a fee to the premiums charged to a client’.

However, that decision was based ‘substantially, though not entirely’ on evidence from an individual who had been ‘discredited’ in a related court case.

Allen passed a judge’s statement to that effect to the FCA, but redacted sentences indicating that he too was ‘disbelieved’ by the judge who had concluded that Allen ‘had knowingly advanced an untrue case’.

The FCA subsequently obtained a complete copy of that judgement, and used it in its determination that Allen was not a fit and proper person.

In doing so the regulator abandoned its original argument regarding the secret fees, but contended instead that Allen’s ban should nevertheless still stand because of the ‘damning remarks’ about him in the judgement.

That change in grounds was the crux of the case brought before a tribunal headed by Judge Colin Bishopp.

‘The reference is unusual in that, although the Authority has throughout maintained that Mr Allen is not fit and proper, it has fundamentally changed the basis on which it advances that case,’ Bishopp explained.

‘The subject matter of the reference is whether or not Mr Allen is fit and proper in the general sense, and not merely and specifically in relation to a particular transaction or set of transactions.’

In a ruling last week, Bishopp decided that Allen’s prohibition should be upheld by the FCA.

‘The fact that Mr Allen produced a redacted and therefore misleading extract from the judgment, designed as we have said to discredit [the other witness] while concealing the findings made about his own conduct is, alone, sufficient to demonstrate that he is not a fit and proper person,’ Bishopp stated.

‘It was also an inescapable conclusion that the provision of a redacted copy of a single page of the judgment was not, as Mr Allen had claimed, a misguided mistake. It was the only partial and redacted document he had supplied; and it was plain that his purpose in providing it in that manner was to discredit [the witness] while preventing the Authority from finding out that he too had been strongly criticised.

‘Even if there might be any doubt about the motive for producing the redacted page, that doubt could not survive Mr Allen’s refusal to produce a complete copy when asked.’

Bishopp added: ‘His attempt to divert the Authority by discrediting [the witness] and concealing his own wrongdoing is, we are satisfied, an indication of his inability to understand the need for complete candour in his dealings with a regulator and that attempt, too, shows that he is not a fit and proper person.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Your Business: Cover Star Club

Profile: a Williams de Broe vet on striking out from Investec

Profile: a Williams de Broe vet on striking out from Investec

Laurence Boyle and his team became ‘somewhat of an oddity’ within Investec after joining via its acquisition of Williams de Broë

Wealth Manager on Twitter