The Financial Services Authority has today fined Paul Tebbutt, chief executive of financial advisers Millfield Partnership Limited (MPL) £35,000 for providing misleading information to the FSA in connection with an application by MPL to merge with another financial advisor group Inter Alliance.
The misleading information related to a signed letter supplied to the FSA on 30 September 2004 confirming the intention of seven directors of the merged company, including Mr Tebbutt, to provide a directors' guarantee of £3 million supported by unencumbered assets of the same amount.
Mr Tebbutt failed to ensure that there were sufficiently firm intentions by the directors concerned to commit at this level and that they were adequately recorded. Subsequently from at least 4 October to 13 October 2004, Mr Tebbutt, after learning that the full guarantee could not be provided, failed to inform the FSA of this crucial information.
The signed letter of intent was an important consideration in the FSA's decision to approve the merger on 30 September. In the event the £3 million guarantee was never provided.
Margaret Cole, FSA Director of Enforcement, said:
"It is vital for effective regulation that information provided to the FSA by approved persons and firms is accurate so that the FSA can make properly informed regulatory judgements. A decision whether to approve a change of control for a firm is a particularly significant decision for the FSA with potential for serious detriment to consumers. In this case it was essential that the FSA could rely on Mr Tebbutt to provide accurate and reliable information and to advise promptly when aware this did not remain the case. The FSA will take action against individuals and firms that provide misleading information in this way."
Background
- The full text of the Final Notice, dated 10 April 2006, is available on the FSA website. This includes the background to the case, the relevant statutory provisions and the regulatory requirements contravened and the factors taken into account when setting the level of the fine.
- In deciding on its action the FSA had regard to Statements of Principle 2 and 4 for Approved Persons:
- Statement of Principle 2: An approved person must act with due skill, care and diligence in carrying out his controlled function (APER 2.1.2[P]).
- Statement of Principle 4: An approved person must deal with the FSA and with other regulators in an open and cooperative way and must disclose appropriately any information of which the FSA would reasonably expect notice (APER 2.1.2[P]).
- This case was settled under the FSA's Executive Settlement Scheme.
- 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; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness
