FOS’s latest Ombudsman News looks at: coronavirus: so far, FOS has not seen many complaints on the impact of the virus, but expects it will see more complaints particularly in relation to travel insurance, medical...
Category - Enforcement & Litigation
Emma RadmoreInvalidly executed deeds of guarantee still enforceable
In Signature Living Hotel Ltd v Sulyok [2020] EWHC 257 (Ch), the High Court was asked to consider whether two deeds of guarantee were enforceable in circumstances where the signature of the director of the surety had...
Scott NodderLegal Privilege in Investigations
In Sports Direct International plc v Financial Reporting Council [2020] EWCA Civ 177, the Court of Appeal (CoA) has allowed an appeal, overturning a lower court’s decision that certain emails had to be disclosed...
Luke HolmesBarnier to be EU negotiator on post-Brexit issues
The Council of the EU has adopted a decision authorising negotiations between the EU and UK towards a new partnership and authorising the European Commission, in the person of Michel Barnier, as the EU negotiator. The...
FCA bans motor finance ads
FCA has banned a range of adverts for motor finance issued by Rix Motor Company Limited. The ads, variously: did not include representative examples of the costs of credit, or included them in a way that made them...
Unfair Treatment lands Moneybarn big fine
The FCA announced today that it was imposing a £2.77 million fine on Moneybarn Limited for not treating customers fairly between 1 April 2014 and 4 October 2017. The car finance provider had failed to provide adequate...
Caroline StevensonFCA speech on penalties, remediation and General Principles
On 12 February, Mark Steward, Executive Director of Enforcement and Market Oversight made a speech at an event on Investigations and Enforcement: A Guide to Managing Regulatory Action. Key takeaways from the speech...
Natasha BrownleeCourt dismisses UWO appeal
The Court of Appeal has dismissed an appeal against the first UWO imposed under the powers the CFA gave to the NCA. The UWO had been imposed in relation to the Azeri wife of an Azeri banker. A property had been...
Regulators warn firms on selling personal data
The FCA, ICO and FSCS have warned regulated firms and insolvency practitioners of the need to be responsible when dealing with personal data. The regulators have become aware of sales of client data to CMCs either...
PRA issues bans following failure of Enterprise the Business Credit Union Ltd (EBCU)
The PRA has banned two former EBCU directors from the financial services industry for their part in the failure of the company, which held £7m in savings for its 1,900 members. EBCU entered into administration in 2015...
Lucy HadrillSFO publishes Airbus DPA
On Friday, Dame Victoria Sharp, President of the Queen’s Bench Division, approved a Deferred Prosecution Agreement between the Serious Fraud Office and Airbus SE. Under the terms of the DPA, Airbus SE agreed to...
Audrey KohTPR fines FCA Pension Plan
The Pensions Regulator has fined the FCA Pension Plan £2,000 for a non-compliant chair’s statement, the maximum penalty which it can levy for this type of breach. The chair’s statement requires trustees of...
Gavin EllisonEU to prioritise green deal and MLD5 implementation
In his opening remarks to the ECOFIN conference, Valdis Dombrovskis, handing over to the new Croatian Presidency, singled out as key developments: the Green Deal or Sustainable Europe Investment Plan, the success of...
Regulators consult on FSCS levy
PRA and FCA are consulting on the FSCS Management Expenses Levy Limit for 2020/2021. The proposed limit is £78.2m management expenses budget (a nearly 5% increase on the current year) and a £5m contingency reserve...
FCA takes action against illegal deposit taker
FCA has started civil proceedings against Briths Managment (sic) Solution Limited, Soccer League International Limited, Soccer League UK Limited and various individuals, for alleged unauthorised deposit-taking. It...
Tribunal upholds CMC fine
The First-tier Tribunal has upheld a fine the Claims Management Regulator had imposed on a company, in an action taken over now by FCA. The CMR found Hall and Hanley: had sent marketing texts to customers without taking...
FCA fines CMC for misleading communications
FCA has published its first fine since taking over regulation of Claims Management Companies. It has fined Professional Personal Claims Limited £70,000 for misleading customers through its website and printed materials...
FCA secures £291,070 confiscation order against convicted fraudster
The FCA has issued a press release confirming that a confiscation order of £291,070.36 has been obtained against a convicted fraudster. Barry Starling is already serving a 5 years’ prison sentence for defrauding...
Rachael PrestonPRA fines banks £43.9m for regulatory reporting failures
The PRA has announced that a combined penalty has been imposed on three Citi entities of £43.9 million. The penalty arises from failings in their internal controls and governance arrangements, resulting in incomplete...
Roseyna JahangirFCA fines for fund investor TCF failings
FCA has fined Henderson Investment Funds Limited (HIFL) nearly £2m for failure to treat fairly over 4,500 retail investors in two of its funds, thereby breaching Principle 6. FCA found the funds’ investment...
Barry StimpsonFCA endorses SEC no action letter
The FCA has endorsed SEC’s extension of its staff ‘no-action letter’ until 3 July 2023. The no-action letter addresses potential conflicts between US regulation and MiFID 2. MiFID 2 permits investment...
Jonny WilliamsFCA imposes £15.4m file for Principles breaches
The FCA has announced that it fined an interdealer broker, Tullett Prebon, £15.4 million, due to ‘serious’ breaches of: Principle 2, by virtue of failing to conduct their business with due skill, care and...
ESMA consults on MAR review
ESMA is consulting on its required review of MAR. Its paper looks at many issues including: whether to include spot FX within MAR; differing concepts of inside information and delayed disclosure of it; whether the...
ESMA calls for evidence on product intervention measures
ESMA has launched a call for evidence to look at how effective the product intervention measures on CFDs and binary options have been. ESMA needs to report to the Commission on its experience, and welcomes views of...
FCA fines Pru for non-advised annuity sales failings
FCA has fined the Prudential Insurance Company Limited £23,875,000 (including a 30% discount) for failures in its non-advised annuity sales business. FCA found that, for a 9 year period ending in late 2017, the non...
Borrower can withhold payment because of risk of US secondary sanctions
The High Court has held that a UK borrower was entitled to withhold payments under a loan from an entity that was a US Blocked Entity for fear of possible consequences from US secondary sanctions that would...
FCA prosecutes for document destruction
FCA has brought its first prosecution for a destruction of documents offence under FSMA. It has prosecuted Konstantin Vishnyak, who it was investigating for suspected insider dealing, for destroying documents which he...
Tabernula defendant imprisoned
As a result of a conviction for money laundering following the “operation Tabernula” investigations, Richard Baldwin has been sentenced to 5 years and 8 months imprisonment. This follows convictions of...
European Parliament Think Tank briefing on AML state of play
The European Parliament’s Economic Governance Support Unit has published a paper that outlines the current initiatives and actions targeting reinforcement of the AML supervisory and regulatory framework in the EU...
ASA rules share tipping site ad misleading
The ASA has upheld complaints in relation to three websites for Stockmarket Insider, an “investment advisory service”. The websites claimed: “of the thousands of “investment advisory...
Data breaches and insider trading – lessons for public companies
We have written an article highlighting the risks of insider trading relating to a personal data breach, in the light of the SEC’s action against Equifax executives.
Tribunal partially overturns FCA on lack of integrity consequences
The Tribunal has delivered its decision on FCA’s proposal to impose a public censure and ban from carrying on any significant influence functions on Andrew Tinney for his actions as COO of Barclays Wealth and...
SFO publishes “co-operation” guidance
The SFO has published guidance for corporates aimed at helping them to understand what it means by “co-operation” when it is considering its charging decisions. The SFO says it is assistance that goes above...
Treasury Committee calls for FCA powers on perimeter changes
The Treasury Committee has unanimously called for FCA to be given formal powers to recommend changes to the regulatory perimeter. It says the current informal system allows the grey area between regulated and non...
FRC fines KPMG and individual over CASS reports
The Financial Reporting Council has fined KPMG Audit plc £3.5m (including a 30% reduction for it admitting the misconduct) and one of its (now) partners £52,500, reprimanded them, and imposed a requirement on the firm...
Market Watch focuses on insider dealing risks
The latest edition of FCA’s Market Watch focuses on FCA’s concerns on access to inside information, following the conviction of a former compliance officer for sharing information. FCA noted that Fabiana...
PRA sets out their approach to enforcement
In a recent speech, Miles Bake, head of the PRA’s enforcement and litigation legal division, provided insight into: the PRA’s rationale for enforcement recent examples of enforcement action key themes; and...
Tribunal refuses suspension application
Sussex Independent Financial Advisers Limited had applied to the Tribunal for a suspension of the FCA’s decision to vary its permission to remove all its permitted activities on the basis that the firm did not...
FCA consults on vulnerable customer guidance
FCA has published a guidance consultation on what it considers the Principles require of firms in terms of fair treatment of vulnerable customers. It thinks firms have made big improvements generally, but now wants to...
FCA fines Standard Life for non-advised sales failings
FCA has fined Standard Life Assurance Limited £30,792,500. The fine relates to non-advised sales of annuities, and sales practices over nearly 8 years. Although the sales were non-advised, FCA found that the firm...
European Ombudsman supports Commission on AML 3rd country info
The European Ombudsman has published its decision in relation to a complaint brought by a member of the European Parliament whose request to the European Commission to give him public access to various documents...
SFO confirms DPA with metals tech firm
The SFO has announced that in 2016 it entered into a DPA with Sarclad Ltd, a technology provider for the metals industry. The DPA related to charges of corruption and failure to prevent bribery between June 2004 and...
FCA invites feedback on Gabriel replacement
The FCA has announced that it is planning a replacement for Gabriel, its data collection system. It has therefore asked current Gabriel users to complete a feedback survey to provide views that can be considered in the...
FCA announces money laundering conviction in insider dealing link
Reporting restrictions have been lifted such that FCA has finally been able to confirm a conviction it secured against Richard Baldwin in 2017 for dealing in criminal property. The property was related to FCA’s...
ESMA warns CFD providers on undesirable practices
ESMA is still concerned about firms that market, distribute or sell CFDs to retail clients. It has now published a warning to them, saying it is particularly worried about: encouraging retail clients to ask to opt up to...
HMRC updates MLR appeals guidance
HMRC has updated its website with guidance on how to appeal against an HMRC decision, and how it sets penalties. The guidance explains what HMRC may levy penalties for, and what its remedies are. It also explains that...
Court backs bank on account closure
A payment institution has failed in its action against RBS, after the bank closed the institution’s accounts with it and ended the banking relationship. The payment institution (P) was an FX and payment services...
FCA publishes annual report
FCA’s Annual Report and Accounts for 2018/19 lists its highlights from the past year, and appends several reports from specific business focuses. FCA notes that alongside deciding over 4,000 applications for...
CMA censures Barclays for SME undertaking breach
CMA has censured Barclays, and directed it to pay £1,910.55 to affected SMEs for making them pay for accounts they did not need. The bank had bundled products together, which had the effect of preventing SME customers ...
FOS consults on funding
FOS is consulting on its future funding model. It says it is looking forward to a time when it is not dominated by PPI, and is looking at how it should: rebalance the proportion of income it gets from its levy as...
FCA announces insider dealing imprisonment for former compliance officer
A former compliance officer at UBS has been sentenced to 3 years’ imprisonment for insider dealing, following a prosecution brought by FCA. Fabiana Abdel-Malik used her position to acquire confidential and...
Bank fined £45.5 million for failure to share suspicions of fraud with FCA
The FCA has announced that Bank of Scotland has been fined £45,500,000 (reduced by 30% from what would have been a £65 million fine) for its failures to be open and cooperative with the regulator and thereby breaching...
IOSCO Cyber Task Force report urges financial market regulators and firms to enhance approach to Cyber risks
The Board of the International Organization of Securities Commissions has published the Final Report of its Cyber Task Force. This report is intended be a resource for financial market regulators and firms to raise...
CMA may be given enhanced powers to impose fines for consumer law breaches
The government has announced that it will consult on whether the CMA should be given the power to fine businesses directly if they have breached consumer law, for example through the ‘loyalty penalty’ and...
FCA publishes first perimeter report
FCA has published the first of what will be an annual report on its regulatory perimeter. Among other things, the report is designed to explain what challenges the perimeter is presenting and whether there might be a...
Baroness Manzoor takes on FOS Chair
Baroness Zahida Mansoor will become chair of FOS in August, succeeding Sir Nicholas Montagu.
Employer can rely on Tribunal view in F&P assessment
An article in our Employment Briefing highlights the case of Radia v Jefferies International Limited. Jefferies had relied on findings from the Employment Tribunal that an individual’s evidence in respect of a...
PRA and FCA impose £1.89m fine for outsourcing failures
The PRA and FCA have imposed a joint fine on Raphaels Bank following an investigation in to the cause and consequence of an IT incident in December 2015. The incident occurred by a failure of services provided by a sub...
FCA publishes asset management competition breach case study
FCA has published its decisions against 3 asset management firms that breached competition law. FIN reported on the breaches in February. The decisions are accompanied by a case study, which explains what the firms...
CMA writes to Santander on overdraft charge breach
CMA has written to Santander UK setting out its views on a breach by the bank of hte Retail Banking Market Investigation Order. It says the bank imposed unarranged overdraft charges on around 20,000 PCA customers...
FCA extends temporary permissions deadline
FCA has confirmed the deadline for EEA firms to notify it of their intention to use the temporary permissions regime is now 30 October. FCA has updated its website with details of how the TPR applies, and its policy for...
London Capital & Finance investigation starts
Treasury has announced an investigation into the collapse of London Capital & Finance and FCA’s supervision of the firm. John Glen, Economic Secretary to the Treasury, said there is an urgent need to...
FCA publishes unfair term undertaking
FCA has published an undertaking from Capital Financial Management Limited. It considered two term in the company’s debt management contract gave the firm sole discretion on what it could charge customers who...
Fund umbrella providers come under fire
FCA has published the results of its review into how firms in the investment management sector that have Appointed Representatives comply with their regulatory obligations as principals. There are over 1000 ARs in the...
FCA successful in High Court case against unauthorised forex firm
Following an application by the FCA, the High Court recently ruled that Xcore Capital Limited, an unauthorised forex firm, and broker, Mr Jonathan Chitty had carried on an unauthorised investment scheme. Consumers were...
Angie BamboulisECJ judgment means TUPE may apply on transfer of clients’ investments
In Dodič v Banka Koper and another C-194/18, the European Court of Justice (ECJ) had to decide whether the Acquired Rights Directive (ARD) applied where a stock market intermediary stopped providing services and gave...
EC fines banks for FX cartel
The European Commission has fined 5 banks for taking part in 2 cartels involving 11 currencies in the spot fx markets. It has imposed fines totalling over €800m on Barclays, RBS, Citigroup and JP Morgan for the so...
FOS Annual Review 2018/2019
The Financial Ombudsman Service (FOS) has published its Annual Review 2018/2019. The Annual Review highlights that FOS has: received more than 388,000 complaints over the past 12 months, which is up 14% on 2017/2018...
FCA publishes undertaking on unfair contract term
On 9th May, the FCA published an undertaking by James Brearley & Sons Limited in relation to a term in their Services Terms and Conditions which allowed them to terminate their contract with their customers without...
FCA takes action on pensions advisers lacking integrity
FCA has published decision notices against three firms and five individuals, setting out its decision to find them for acting without integrity in pensions advisory businesses and misleading FCA. The individuals have...
ICO fines for spam PPI claim texts
The ICO has fined a claims management company £120,000 for sending spam texts. It found Hall and Hanley Ltd, using a third party, had sent over 3.5m direct marketing texts about PPI claims without having valid consents...
FCA objects to Complaints Commissioner decision on inaccurate register entry
The Complaints Commissioner has told FCA to pay compensation to a consumer who lost money after investing with what they believed to the be UK operation of an Austrian firm but was in fact fraudsters who had cloned the...
Court upholds fines imposed by Pensions Regulator on master trusts
Appeals by two master trusts against fines imposed by the Pensions Regulator (tPR) for making incomplete annual chair statements have failed. Occupational schemes providing money purchase benefits have to prepare an...
FCA fines for market abuse control failings
FCA has fined Linear Investments Limited £409,300 for the firm’s breach of Principle 3 by failing to take reasonable care to organise and control its affairs responsibly and effectively. In particular, FCA found...
FCA announce delay of publication of rules for CFD
Further to our article in December, the FCA have published a statement announcing that it is delaying publication of final rules for CFD products and CFD-like options. The FCA consulted on permanent rules to restrict...
FCA publishes enforcement and supervision ‘Approach’ documents
Following consultations in March 2018, the FCA has published its ‘Approach to Supervision‘ and ‘Approach to Enforcement‘ papers. The Supervision paper describes the FCA’s role in promoting...
FCA publishes PFOF findings
FCA has published an update to its Market Watch item on payment for order flow. It has now carried out a review of 15 firms, to check how they monitor compliance with FCA requirements around conflicts, inducements and...
Pension plans must be proactive
We have written an article on how pension plans must be proactive now that the regulator is increasingly taking a tougher regulatory approach.
The Pensions Regulator’s Stronger Powers
We have written an article on the changes to the powers of the Pensions Regulator in relation to defined benefit schemes, following Government consultation and response.
PRA proposes amendments to enforcement action settlement policy
PRA is consulting on changes to its policy on the settlement of enforcement action. The consultation proposes changes to its Enforcement Statement of Policy. The proposals include keeping the 30% discount for early...
FCA fines SCB £100m for AML failings
FCA has imposed its second largest ever fine for AML controls failings. It has fined Standard Chartered Bank £102.2m for failings in its wholesale bank correspondent banking business and its branches in the UAE. It...
FCA’s decision to fine broker for market abuse upheld
The Upper Tribunal has today published its decision in Linear Investments Ltd v FCA [2019] UKUT 0115 (TCC) (FS2018/054), in which it upheld the FCA’s decision to fine Linear for market abuse failings. In September...
FCA gives investigations update
Mark Steward has spoken on partly contested cases, the pipeline and AML investigations. Key points included: the partly contested case process has, since 2017, allowed those subject to FCA disciplinary action to choose...
ESMA happy with national product intervention measures
ESMA has issued positive opinions on product intervention measures taken by not only the FCA in relation to binary options, but also the Polish KNF and Dutch AFM (also in respect of binary options), and a further...
CMA issues Directions to 5 banks
The CMA has issued directions to 5 banks (Bank of Ireland, Santander, LBG, HSBC and Danske) who have not delivered all aspects of their App-to-App functionality. The directions explain what the banks are to do...
FCA makes binary option banning rules
FCA has published its final position and Handbook Rules on permanent product intervention measures that will ban sale, marketing and distribution of binary options to retail consumers. ESMA has extended its temporary...
London Capital investigation to start
Treasury has announced an independent investigation into what happened at London Capital & Finance. Treasury and FCA both feel there is public interest in a statutory investigation, and so Treasury is using its...
FCA regulation of CMCs starts
1 April saw the start of FCA regulation of claims management companies. Over 900 companies have registered with FCA for temporary permission, without which they cannot operate until fully authorised. FCA will have the...
Senior bankers sentenced for manipulating EURIBOR rate
The Senior Fraud Office (SFO) announced that 2 former senior bankers at Barclays, Carlo Palombo and Colin Bermingham, were sentenced to a total of 9 years imprisonment at Southwark Crown Court for manipulating the Euro...
FCA fines GSI £34m for 10 years of poor transaction reporting
FCA has fined Goldman Sachs International £34.3m for failing to provide accurate and timely reporting from the date of implementation of MiFID (November 2007) to March 2017. The failings affected over 220 million...
HM TREASURY PUBLISHES FINDINGS ON FSA SUPERVISION OF CO-OP BANK PLC
HM Treasury has published the findings of an independent review into the prudential supervision of the Co-Operative Bank between 2008 – 2013. The findings of the report were balanced, but did identify possible...
Europe reaches political agreement on reforms to EU supervision
The European Parliament and Member States have reached agreement on core elements of the reform of European supervision of financial markets, including strengthening the supervisory framework in the area of anti-money...
EBA agrees form of MoU between European and UK supervisors
As part of the no-deal Brexit preparations, the Board of Supervisors of the EBA have confirmed that a template MoU has been agreed with the FCA and PRA. If there is a no-deal Brexit, this template will be used as the...
Treasury Committee asks for London Capital inquiry
The Treasury Committee has written to Treasury and FCA asking for an investigation into the events at London Capital and Finance. FCA had told the firm to withdraw its promotional materials for its mini-bonds in...
WBD boosts expertise with white collar partner
Womble Bond Dickinson is delighted to have expanded its offering in the financial services and insurance sectors with the hire of white collar crime partner, Audrey Koh. Audrey has substantial experience of advising...
FIN. TeamFCA fines Carphone Warehouse for insurance misselling
FCA has fined the Carphone Warehouse over £29 million for misselling its “Geek Squad” mobile phone insurance and technical support product, and acting in breach of its Principles 3,6 and 9. Following...
Insurance MoUs agreed between BoE, FCA, EIOPA and EU supervisors
The UK supervisory authorities have agreed memoranda of understanding with European counterparts, to facilitate the coordinated supervision of insurance entities in the event of a no-deal Brexit. The MoUs cover...
BoE and FCA update on Brexit approach
BoE and FCA have updated their respective websites with coordinated information on their approach to a hard Brexit. BoE has published a series of materials setting out its updated plans to its supervisory approach to a...
FCA takes first competition action
In its first decision under its competition powers, FCA has found that 3 asset management firms have breached competition law by sharing of strategic information, the effect of which was that the firms knew each others...
EBA investigates regulators over Danske Bank
EBA has opened a formal investigation into possible breaches by the Estonian and Danish financial services regulators of EU law in connection with the links of Danske Bank and, in particular, its Estonian branch, with...