UK's Financial Services Authority Censures And Bans Three Directors From Acting As Senior Managers For Falling Short Of FSA Standards

The Financial Services Authority (FSA) today publicly censured and banned Stephen Coles, Luke Ryan and Michael Yamoah, the three directors of Simply Trading Group Limited (STG), from senior management positions for falling short of FSA standards.

Coles, Ryan and Yamoah shared responsibility for the management of STG. The firm was a small private client advisory stockbroker in London and Hampshire which specialised in telephone sales of securities traded on the main market of the London Stock Exchange, as well as higher risk securities traded on the AIM and PLUS markets through its two appointed representatives. As a consequence of the action the FSA has taken against the directors of STG, the firm no longer meets FSA requirements and has therefore been cancelled with the agreement of the directors.

The FSA’s investigation found that Coles, Ryan and Yamoah:

• relied too heavily on an external compliance consultant for advice on how to run their business;
• failed to make sure that STG met regulatory requirements, including capital resource requirements and implementing adequate systems and controls; and
• failed to monitor adequately their two appointed representatives, creating a serious risk that customers may have received unsuitable investment advice. This included a failure to ensure that call monitoring equipment was in place at one of the appointed representatives.

The problems at STG were initially identified by the FSA as part of its high pressure selling thematic project, which is ongoing and which will continue to result in disciplinary action being taken against firms where appropriate.

Margaret Cole, FSA director of enforcement and financial crime, said:

"Senior management of firms are responsible for the standards and conduct of the businesses they run. As directors of Simply Trading Group Limited, Stephen Coles, Luke Ryan and Michael Yamoah failed to discharge this responsibility.

"We believe that Coles, Ryan and Yamoah would pose a serious risk to consumers and to confidence in the financial system if they were to act as senior managers in an authorised firm. For this reason, they have been prohibited from carrying out any senior management roles in the future."

The FSA would have imposed a fine of £17,000 on each of the directors had they not provided verifiable evidence of serious financial hardship. The FSA has therefore imposed a public censure to act as a deterrent.