Andrew Procter, Enforcement Director, said: "UK markets have a reputation for being a clean and fair place to do business. Where individuals behave in a way that puts that reputation at serious risk we will act to remove them from the industry."
Colin Gamwells, as Dealing Director, was responsible for Brandeis' trading activities with and for customers. He has been prohibited from performing any managerial, compliance or trading role which requires approval by the FSA as he has been found to be not fit and proper. The FSA found that in 1996-7:
- Gamwells was aware of and permitted the deliberate mispricing of the Black Customers' orders and the deliberate misuse of confidential information relating to the Black Customers' orders by the Brandeis traders;
- Gamwells himself participated in the deliberate mispricing of the Black Customers' orders and himself misused confidential information by disclosing details of those orders to other Brandeis proprietary traders and by himself trading ahead of the Black Customers;
- Gamwells failed to have in place satisfactory systems of internal control.
- Griffiths deliberately mispriced the Black Customers' orders;
- Griffiths deliberately disclosed details of the Black Customers' orders to other Brandeis proprietary traders and to third parties;
- Griffiths deliberately traded ahead of the Black Customers for the benefit of Brandeis and third parties.
- Bruce and O'Connell actively sought confidential information about the Black Customers' orders and deliberately traded ahead of those orders for the benefit of the proprietary trading books for which they were responsible. Bruce also deliberately traded ahead of the Black Customers' orders for the benefit of a third party;
- Bruce and O'Connell deliberately disclosed details of the Black Customers' orders to third parties. O'Connell also disclosed this information to other Brandeis traders.
The former CEO had prime responsibility for the organisation and control of Brandeis' affairs. The former Compliance Officer had responsibility for Brandeis' compliance procedures. The FSA does not assert that either individual was himself aware of or involved in the mispricing or misuse of confidential information and the FSA accepts that when allegations of mispricing and misuse of confidential information were made to Brandeis, both individuals immediately brought these allegations to the attention of the Securities and Futures Authority. In the circumstances, the FSA has accepted undertakings from the former CEO not to perform any management function and from both the former CEO and the former Compliance Officer not to perform any compliance function which requires FSA approval in the future.
More details about the actions of Gamwells, Griffiths, Bruce and O'Connell and the reasons for their prohibition can be found in the published final notices.
Details of the expulsion of Brandeis in 2001 can be found here.
Background
- In September 2002, certain Brandeis employees sought permission to bring judicial review proceedings against the FSA in respect of FSA's decision to issue warning notices to them. Permission was refused by the High Court in December 2002 and this decision was upheld by the Court of Appeal in July 2003. The Court of Appeal held that FSA decisions should only be subject to judicial review in the most exceptional cases.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.
