On 22 February 2016, the FCA issued a final notice against WH Ireland Limited (WHI), a stock broker and wealth manager, imposing a £1.2 million fine and a 72-day restriction from taking on new clients in its corporate broking division.
The penalties were the result of the FCA’s finding that WHI failed to take reasonable care to put in place effective systems to protect against market abuse (contrary to Principle 3 of the FCA’s Principles for Business).
The FCA considered WHI’s failings to be particularly serious because:
- the range of services that WHI performed meant that it was exposed to a broad range of market abuse risks;
- WHI’s regular receipt of inside information meant that there was significant scope for an adverse impact on the market if that inside information was mishandled; and
- WHI had failed to implement all of the changes recommended by an earlier independent FCA review within agreed deadlines.
The temporary ban on taking on new clients is a rare move by the FCA, which has identified it as being appropriate because it “is a more effective and persuasive deterrent than a financial penalty alone.”