Semperian PPP Investment Partners (Semperian) has pleaded guilty to an offence under section 191(3) of the Financial Services and Markets Act 2000. Semperian acquired an authorised firm before it had received the necessary approval of the Financial Services Authority (FSA).
The case related to a deal in early 2009 in which Semperian acquired full control of a regulated entity from another investor. The FSA alleged that Semperian notified the FSA in December 2008 of its intention to complete the deal but failed to wait for the regulator's approval before acquiring the firm three weeks later. Retrospective approval for the change of control was subsequently granted by the FSA.
The deputy district judge presiding over the court proceedings imposed a penalty of £1,000 and said Semperian had taken a calculated risk that the FSA would not prosecute. In determining the size of the penalty, the judge considered the fact that Semperian had pleaded guilty at the earliest opportunity and that there had been no adverse impact on consumers. The FSA is expected to take a tougher line on breaches of the change of control regime. For change of control offences committed after the 21 March 2009, the courts have the power to impose an unlimited fine. Any individual who takes a controlling interest in a firm despite receiving an objection from the FSA risks going to prison for up to two years.
This is the second prosecution the FSA has brought for change in control offences. The first was against Vijay Sharma, who pleaded guilty in September 2009 to failing to notify the FSA of his acquisition of a controlling interest in a mortgage broker and was fined £3,000.