Intermediary firm City Gate Money Managers Ltd (City Gate) and its compliance officer, Stewart Domke, have received their Final Notices from the FSA in relation to a number of compliance and financial promotions failings.
Following an investigation, the FSA found that City Gate had been advising on pension transfer and income drawdown even though it did not have permission to do so, in clear breach of section 20(1)(a) of the Financial Services and Markets Act 2000 (FSMA). City Gate had also produced a financial promotion but failed to adequately explain the risks involved in the offer letters, which also used a number of high profile partner companies' brands without their permission. Furthermore, City Gate was found to have failed to establish adequate systems and controls to facilitate sufficient and appropriate oversight of its advisers and appointed representatives.
City Gate had previously been subject to FSA enforcement action back in July 2009, in relation to compliance failings. However, Domke had failed to ensure that those previous failures had been properly addressed. It was Domke's responsibility as compliance officer to ensure that the financial promotions issued by City Gate complied with FSA rules and he had failed to do this. He was also found to have delegated significant parts of his compliance function to other people without properly monitoring their work.
City Gate went into liquidation in 2010 and for this reason the FSA did not impose a fine on the firm, which it ordinarily would have done. Instead, the FSA publicly censured City Gate and Domke. Domke's CF1 and CF10 approvals were withdrawn and he was banned from performing any further significant influence function.