The Financial Services Authority (FSA) today, for the first time, published two decision notices for enforcement decisions that have been referred to the Upper Tribunal (the Tribunal). These are the first decision notices to be published under a power given to the FSA by parliament in 2010.
Stuart Unwin and Derek Wright have both referred their cases and will now present their cases to the Tribunal, as will the FSA. The Tribunal will then determine the appropriate action for the FSA to take. The Tribunal may uphold, vary or cancel the FSA's decision. The Tribunal's decision will be made public on its website.
The date for these hearings will be set in due course.
The FSA was given the power to publish decision notices by parliament in 2010. After first consulting, the FSA published a policy statement in February 2011 which set out its approach to publishing decision notices.
Stuart Unwin
In a decision notice dated 2 March 2011, the FSA set out its decision to prohibit Mr Unwin from holding a significant influence function (SIF) on the basis that he is neither competent nor capable to do so.
In the FSA’s opinion, Mr Unwin failed to ensure that his firm had adequate systems and controls to ensure that occupational pension transfer advice given by his firm was suitable and signed off by a pension transfer specialist, despite being previously warned by the FSA that he must do this.
The FSA also considers that Mr Unwin delegated compliance responsibilities to an individual whom Mr Unwin knew lacked experience but Mr Unwin failed to check the standard of their work. The FSA also considers Mr Unwin failed to ensure the effective monitoring of his sales staff, including trainee advisers.
Derek Wright
In a decision notice dated 23 February 2011, the FSA set out its decision to prohibit Mr Wright from all regulated activity, on honesty, integrity and competence grounds. The FSA believes Mr Wright was unwilling to comply with the FSA approved person regime and provided misleading information to the FSA.
In the FSA’s opinion Mr Wright arranged for his wife, Mary Wright, to take on the FSA approved roles while he actually ran the firm, Moorgate Insurance Agencies Ltd (Moorgate), a small insurance broker.
Mrs Wright therefore had no involvement in the running of the business at Moorgate and did not exercise her function as a director properly. This meant that Mr Wright was able to run Moorgate unsupervised and unchallenged by Mrs Wright.
Mr Wright had previously been disciplined by Lloyds of London in 2001 and the FSA believes that this would have been a highly relevant factor in its assessment of his fitness if he applied for approved person status.
The FSA also believes that Mr Wright failed to be open with the FSA about his true role in running the business and although he effectively acted as a director of the firm, he produced poor quality regulatory returns and failed to ensure the firm had adequate resources.
Mrs Wright agreed to be prohibited from all regulated activity. She has not referred her case to the Tribunal.