A partner of a mortgage broker has been prohibited due to a lack of knowledge or involvement in the firm’s mortgage business or the relevant regulatory requirements. During long periods of absence due to illness, she failed to delegate her significant influence responsibilities or, alternatively, to relinquish her responsibilities in the appropriate manner, despite having opportunities to do so.
View Nighat Mirza, 15 December 2009.
In the case of Stephen Robert Allen (11 December 2009) the Tribunal reduced a total prohibition to a management and controlled functions prohibition on the basis that the director of an insurance mediation firm lacked competence and capability, but was not dishonest or lacking in integrity. The Tribunal referred to the previous cases of Hoodless and Blackwell and Vukelic and adopted the principles set out in Vukelic, stating:
“89. In [Vukelic] the Tribunal expressed the view that a lack of experience was a reason to be wary (in that case of substantial business carrying potential regulatory risks) (paragraph 75); that to turn a blind eye to the obvious, and to fail to follow up obviously suspicious signs is a lack of integrity (paragraphs 93 and 119); and that it is reckless knowingly to take an unreasonable risk (paragraph 94).
90. We adopt all those principles. “
The case turned on emails which Mr Allen received and whether he knew that the firm had used clients' money improperly. The Tribunal decided that the quality of the financial information in the emails was insufficient for it to conclude that Mr Allen was dishonest. The Tribunal found that there were “severe limitations” in the quality of the financial information presented in documentary evidence presented by the FSA. Nor did the Tribunal consider that he "knowingly took an unreasonable risk" and so he was not reckless. Separate consideration was given to whether he was reckless to ignore cumulative warning signs. The Tribunal decided that the collusion of others to misrepresent the firm's financial position through the preparation of false and misleading records meant that Mr Allen may have been misled. There was also some evidence that he did follow up some suspicious signs. Therefore, the Tribunal concluded that he did not act without integrity.
View Stephen Robert Allen, 11 December 2009
In the case of Kuun & MFP Group Plc (17 December 2009), the Tribunal has upheld a Decision Notice issued by the FSA to prohibit a director of a financial advice firm and increased his fine from £50,000 to £75,000 for deliberately misleading the FSA over a sustained period regarding the ownership, control and the nature of his involvement in a separate company, Membership Services Limited ("MSL"). Mr Kuun gave conflicting evidence over the course of the FSA’s investigation and the hearing itself. In broad terms, he maintained that MSL was separately owned and run by an acquaintance called John Graham out of Switzerland. The Tribunal dismissed the evidence of Mr Kuun, amongst other things, finding that there was not credible evidence to suggest that John Graham existed and concluded that a false share sale agreement and other forged documents had been provided to the FSA.
The Tribunal highlighted, amongst other things, that "we must put out of our minds that, in 2007, Mr Garvey and Mr Goddard admitted that they had misused clients’ money. Those subsequent admissions cannot be relevant to Mr Allen’s state of mind at an earlier date" (paragraph 95).
The Tribunal also upheld a Decision notice to cancel the permission of MFP Group Plc to conduct regulated activities on the grounds that it was not fit and proper by reason of its connection with Mr Kunn.
View Kuun & MFP Group Plc, 17 December 2009