The Court of Appeal has upheld the judgment that a borrower was justified in its refusal to make payments under a loan where the ultimate beneficial owner of the lender was an OFAC SDN. Cynergy Bank (a UK bank) had...
Category - Enforcement & Litigation
Emma RadmoreFCA gets judgment against unregulated introducers
FCA has won a case in the High Court against Avacade Limited and Alexandra Associates (UK) Limited and their three directors. The companies provided a pension reports service and made misleading statements as a result...
FCA updates on 2nd BI case management conference
FCA has published the details of, and a provisional transcript from, the second case management conference in its business interruption insurance test case. Key directions include: the permitted interventions of the...
Jonathan DrakeFCA imposes requirements on Wirecard
FCA has imposed a number of requirements on Wirecard, an authorised EMI which is also subject to the PSRs. As a result of ongoing investigations and actions in Germany involving Wirecard’s parent company, FCA...
Jonny WilliamsTreasury Committee concerned about FCA complaints handling
The Treasury Committee has written to the Complaints Commissioner and FCA following a report by the Complaints Commissioner highlighting several observations about a particular case, and FCA’s more general...
FCA publishes defences in BI test case
FCA’s latest update on its business interruption insurance test case: published the sealed Court Order from the Case Management Conference on 16 June; published the Defences of the defendants to the test case...
CJEU considers the application of the Distance Marketing Directive
In KH v Sparkasse Südholstein the European Court of Justice (“CJEU“) considered the application of Article 2(a) of the Distance Marketing Directive (2002/65/EC) (“DMD“) to agreements concluded at...
Amelia GreenFCA finalises BI insurance guidance to firms
Following its consultation on 1 June, FCA has now finalised its guidance to insurers and intermediaries, setting out its expectations on how they should handle complaints and claims under business interruption policies...
Identity of lenders in peer-to-peer lending platform protected by Chancery Appeals Court
In Andrew Milne v Open Access Finance Ltd [2020] EWHC 1420 (Ch) the Court rejected an appeal against the making of a representative order under CPR r. 19.6 but allowed the appeal challenging the identity of that...
Scott NodderFCA fines Commerzbank for AML failings
FCA has fined Commerzbank AG London Branch nearly £38m for AML systems and controls failings spanning a 5 year period to September 2017. The bank benefited from a 30% discount for early settlement. Many of the...
FCA updates on approach to complaints remedies
FCA has made a statement explaining its approach when it receives a complaint about it that it considers well founded. When considering what remedy is appropriate, FCA will take into account the factors under the...
FCA schedules first BI case management conference
FCA has confirmed that the first Case Management Conference before a judge in its business interruption insurance Test Case is to take place on 16 June. At the conference, the judge will be invited to consider...
FCA updates market abuse pages
FCA has updated the guidance on its website on reporting suspected market abuse. The guidance includes FCA’s expectations in respect of how firms should make market observations in situations where they will not...
FCA fines £64m for mortgage arrears handling failures
FCA has fined Lloyds Bank, Bank of Scotland and the Mortgage Business £64,046,800 for failures in relation to handling of mortgage customers in payment difficulties or arrears between April 2011 and December 2015. The...
FCA updates on BI insurance test case
FCA has published a new set of documents relating to the test case it is bringing to get clarity on the coverage of business interruption insurance during the Covid-19 crisis. It has on 10 June (today) announced that it...
FCA publishes Covid-19 guidance for SMEs
FCA has added to its suite of guidance on Covid-19 issues with a pages setting out help available to SMEs. The guidance explains what BBLS and CBILS do, and explains the guidance FCA has given to banks and insurers on...
FOS publishes Ombudsman News
The latest edition of Ombudsman News covers: annual complaints data figures (which FIN already reported) views of FOS on complaints trends FOS’ future strategy how FOS has dealt with its first year of CMC...
FCA publishes quarterly CP
FCA is returning to some regular business and has published a short quarterly consultation, proposing changes to: clarify FSCS’s power to declare in default firms and successors subject to the proposed new...
FCA sets out new DB measures
FCA has published a package of measures to address weaknesses across the defined benefit transfer market. The key changes will: ban contingent charging in almost all circumstances. This will remove the conflict that an...
EVENT: Retail Banking Mixer Webinar
Our next r=Retail Banking Mixer will be held by webinar on 18th June at 10am. We are delighted to be joined by Rosemary Ford and Amber Andrade from Deloitte this time. The webinar continues the focus on COVID-19. Our...
FOS publishes 2019/20 data
FOS has published details of the complaints it received and dealt with in 2019/2020. It received around 270,000 complaints and dealt with nearly 300,000, with the Ombudsman making nearly 30,000 decisions. As ever, the...
FCA updates on LCF report delay
Dame Elizabeth Gloster wrote to FCA on 15 May to note that she would be unable to complete her investigation into FCA’s regulation of London Capital & Finance by 10th July as required. The reason for this is...
FCA takes passports from Cypriot firms
FCA has used its power to remove passporting rights from overseas firms for the first time. It has removed the passports of four Cypriot firms that appear to have used unauthorised celebrity endorsements as part of...
Full details on BI case progress
We have now written a detailed article on the progress in FCA’s Business Interruption insurance test case, including summaries of FCA’s draft guidance, and its selection of polices, wordings and assumed...
FCA updates on BI test case
FCA has updated on its progress towards its test court case on business interruption insurance policies. It has now reviewed around 500 policies from 40 insurers, and has identified 17 policy wordings that capture most...
CMA gets £47m refunds on overdraft charges
CMA has announced that over the past 2 years it has secured more than £47m of refunds for customers in respect of overdrafts where banks failed properly to warn them about unarranged overdraft charges. It has now taken...
Market Watch Covid special
FCA’s latest edition of Market Watch looks at market conduct and discipline in the context of coronavirus. It stresses particularly the importance of complying with the standards of MAR. Given the likely need for...
Regulator Covid-19 update 22 May
After a relatively quiet week, on 22 May: FCA announced further support for customers struggling to pay mortgages due to Covid-19. It is consulting on what options firms will need to provide to customers reaching the...
ASA rules on ad for “pre-approved” credit
The ASA has just announced that it has taken action against Clear Score Technology Ltd for breach of the BCAP Code. We have summarised the ASA ruling here.
FSCS announces 2020/21 levy
FSCS has announced its levy for 2020/2021 at £649m. This is £14m more than forecast in the plan and budget, mainly to reflect estimated compensation costs for LCF opf £44m which will be borne by the Life Distribution...
CMA updates on anti-competitive FS practices
The CMA has updated on progress in its investigations on anti-competitive arrangements in the financial services sector. The initial investigation, which started with information gathering in November 2018, and have...
Court clarifies SIPP providers’ DD obligations
A landmark case decision, in Adams v Options SIPP UK LLP has considered the duties SIPP providers owe to investors. In this case, a SIPP provider facilitated an investment on an execution-only basis for an investor who...
Banks look at new ways to deal with SME complaints
The Business Banking Resolution Service has carried out a pilot study to look at how disagreements between banks and SME customers could be better addressed. The BBRS has been set up by 7 banks and other stakeholders...
FCA updates on business interruption insurance test case
FCA has provided further information on what it is doing to prepare for the test case it plans to bring to clarify various uncertainties over how business interruption insurance should operate during Covid-19. FCA notes...
FCA updates on Covid-19 and complaints
FCA has updated its webpage on how firms should be handling consumers’ complaints during Covid-19. The page explains that FCA has asked firms to prioritise making payments where consumers have accepted offers or...
Regulator Covid-19 update 7 May
On 7 May: PRA announced details of its plans to support firms and enable them and the PRA to focus on the highest priority work: The Climate Biennial Exploratory Scenario is postponed until at least mid-2021; full...
Complaints Commissioner decides on Connaught Complaint
The Complaints Commissioner has published his decision in relation to complaint brought by Mark Bishop about the actions of the FCA’s Chair and Chief Executive in relation to the establishment of the independent...
FCA updates on CBILS and BBLS expectations
On 4 May: FCA updated its statement about the CBILS and BBLS confirming that its position that lenders who comply with CBILS do not also have to comply with the creditworthiness rules in CONC 5.2A.4-34 where the...
Industry welcomes FCA business interruption insurance action
Industry associations have welcomed FCA’s initiative to seek Court declarations on aspects of business interruption insurance cover. The ABI commented that, although the vast majority of policies do not cover...
Regulator Covid-19 update 1 May
On 1 May, FCA: announced proposals for a Court declaration on business interruption claims proposed guidance for insurers on assessing whether products still offer value and appropriate action to take where they do not...
FCA publishes skilled person data
FCA has publicised the number of skilled persons reports commissioned in January to March 2020. It commissioned 24 in total, of which 9 related to retail banking and 6 to retail lending. 6 of the reports were on...
Tribunal rules against FCA on cancellation decision
The Tribunal has ruled on a case brought by Financial Services (Euro) Ltd against FCA. FCA had decided to cancel the firm’s permission because it had no PII cover. The firm contended that FCA was aware that the...
FCA publishes report on PPI complaint deadline
FCA has published its final report on the impact of the deadline for PPI complaints. It concludes that its 2 year communications campaign led to a significant increase in consumer awareness of the deadline and...
FCA publishes complaints figures for H2 2019
The FCA has today published the complaints figures for regulated firms for the second half of 2019. The data showed an increase in complaints from 4.29m in the first half of 2019 to 6.02m in the second half of 2019. In...
FOS updates on Covid-19 activities
The latest edition of Ombudsman News focuses on: how it is working to help complainants during the Covid-19 crisis, including on how it has changed its helpline hours – for which it apologises but asks that it...
Regulator Covid-19 update 3 April
On 3 April: PRA and FCA updated dual-regulated firms on how their should deal with furloughing and compliance with the SMCR; EBA published guidelines on the criteria for public and private moratoria applied before 30...
FOS confirms case fees and releases 2020/21 budget
FCA has confirmed FOS’ 2020/21 budget. Key elements include: continuing to allow 25 “fee” cases for firms outside the group account fee arrangement – so 90% of firms will pay no case fees; 50...
In-action is a breach of duty and amounts to concealment for Limitation defences
In Canada Square Operations Ltd v Mrs Beverley Potter [2020] EWHC 672 (QB) , the High Court heard an appeal by the creditor against the decision of Mr Recorder Rosen QC. In the decision it was found that the creditor...
OFSI fines Standard Chartered £20m for sanctions breaches
OFSI has published details of two monetary penalties totalling £20.47m on Standard Chartered Bank for breaches of sanctions against Ukraine, following a voluntary disclosure by the bank. OFSI levied two separate fines...
Regulators publish 2020/2021 MELL
PRA has published a feedback statement and final rules on the FSCS Management Expenses Levy Limit (MELL) for 2020/2021. In CP 1/20, the PRA and FCA consulted on a proposed MELL of £83.2 million for 2020/21, which...
FCA updates mortgage firm Covid-19 guidance
FCA had provided additional guidance to mortgage firms on payment holidays relating to Covid-19. We reported in this post on the original guidance. FCA has previously required firms to offer payment holidays if they...
FSCS comments on LCF judicial review
As a judicial review action starts in respect of eligibility of London Capital & Finance investors for FSCS payment, FSCS commented that this is a large case, and that it had carried out extensive factual...
CMA issue directions to Paymentshield Ltd
The CMA has issues directions to Paymentshield Limited for failure to send Annual Reviews to PPI customers as required under the Payment Protection Market Investigation Order 2011. The directions require Paymentshield...
FOS looks at insurance coverage
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...
Invalidly 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...
Legal 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...
FCA 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...
FCA 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...