The Financial Services Authority (FSA) has banned Gerald Classey, a partner at First Colonial Investments LLP (FCI), for several failings, including failing to exercise proper oversight of the stock-broking business of the firm and not telling the FSA about previous convictions.
FCI operated as an appointed representative of Direct Sharedeal Limited until March 2009 and its sales advisers made telephone sales promoting high risk securities to retail clients. Classey was the only person approved by the FSA in a significant influence function at the firm. Classey failed to carry out this responsibility and, as a result, he did not realise FCI’s sales practices were seriously deficient.
The FSA discovered that FCI used unsuitable sales practices, failed to deliver shares to clients, failed to safeguard clients’ money, issued unfair and potentially misleading financial promotions and carried out trades after it ceased to be an appointed representative on 31 March 2009.
In addition, Classey had previously been convicted in the USA for two minor offences which he did not disclose in three separate applications to the FSA to become an approved person.
Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:
“Being a partner of a firm carries substantial responsibility for ensuring that the firm meets its regulatory responsibilities. Classey failed to discharge these responsibilities and therefore demonstrated that he is not a fit and proper person.
“We also expect individuals at all levels to be open with the FSA when applying to be an approved person and to disclose any information that may be relevant to their application. Classey’s failure to do so shows that he lacks integrity and is not competent to be an approved person.”
Background
- The Final Notice for Gerald Classey.
- Gerald Classey represented himself as a partner of FCI, and was approved by the FSA to exercise this responsibility from 6 June 2009. He was not a member of the limited liability partnership and had no partnership shares in FCI.
- The FSA published a Final Notice in respect of Direct Sharedeal Limited on 18 February 2010.
- FCI was put into liquidation and the Official Receiver was appointed on 4 November 2009.
- The FSA regulates the financial services industry and has five objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.vary)
