More Enforcement Actions
Related Final Notices in respect of Gerald Casey of First Colonial Investments LLP (“FCI”) and Direct Sharedeal Ltd (“DSL”) have been published.
At one level it is yet another case arising from a combination of high risk shares; telephone sales; inadequate monitoring of the latter; retail clients; and client money. However there are some lessons that can be taken away.
First of all we are reminded that at all times a Principal firm retains regulatory responsible for any Appointed Representative (AR) firms it may have entered into an agreement with (FCI was an AR of DSL).Any firm that does have an AR (or a tied agent) may wish to re-familiarise itself with SUP 12 which contains details of the responsibilities that a firm has for its AR; required terms in the contract etc.
For not exercising sufficient control over its AR, DSL was subject to a fine of £101,500.
The second point to note was that Gerald Casey held the CF4 Partner Controlled Function at FCI. The FSA look to senior management to ensure that an entity’s corporate governance is adequate, as many firms that have received an FSA ARROW visit will be only too aware of. It is clear from the Notice that not only did Mr Casey not appreciate the responsibilities of this position but that those duties were actually carried out by another (unapproved) person who ran the day to day business.
The third matter was that the Form A for seeking approval to hold the functions CF4 and CF30 (Customer Function), that was signed by Mr Casey, did not disclose two previous convictions. The offences (described as ‘minor’) were committed in the US and dated back to 1992. We are reminded that the FSA expect full disclosure of any conviction involving fraud, theft, tax offences or other dishonesty to be disclosed, whether spent or not and whether or not in the UK.
As will be known, an AR is not an ‘authorised firm’ but is rather an ‘exempt firm’. The FSA penalty imposed on Mr Casey was to prohibit him from performing any controlled function in relation to regulated activities carried on by any authorised or exempt firm.