Case concerning CEO referred to the Upper Tribunal

Published: 11/12/2015     Last Modified: 11/12/2015

Mr Charles Anthony Llewellen Palmer, the majority shareholder and CEO of Standard Financial Group Limited (group), and a director and de facto CEO of Financial Limited and Investments Limited ('the firms'), has referred a decision made by the Financial Conduct Authority (FCA) concerning him to the Upper Tribunal (the tribunal).

The FCA  is of the view that, between 24 February 2010 and 20 December 2012,  Mr Palmer failed to take adequate steps to ensure the firms’ appointed representatives (ARs) and individual advisers who had approval to perform the CF30 (Customer) function (CF30s) would give suitable advice to approximately 40,000 customers.

The FCA’s decision is set out in the decision notice which is published today.

Mr Palmer disputes the FCA’s view and has referred the matter to the Tribunal. Accordingly, the decision notice has no effect pending the determination by the Tribunal.

The tribunal may uphold, vary or cancel the FCA’s decision. In the case of the decision to impose a penalty, the tribunal will determine what (if any) is the appropriate action for the FCA to take, and remit the matter to the FCA with such directions as the tribunal considers appropriate for giving effect to its determination. In the case of the decision to impose a prohibition order, the tribunal will determine whether to dismiss the reference or remit it to the FCA with a direction to reconsider and reach a decision in accordance with the findings of the tribunal. The tribunal’s decision will be made public on its website.

In a separate decision the FCA has fined former risk management director at the group, Ms Paivi Katriina Grigg, £14,807 for failing to ensure the network’s risk management framework was adequate to mitigate risks to the group’s customers.

The FCA found that Ms Grigg failed properly to understand and carry out a number of her specific responsibilities. Ms Grigg’s failures resulted in the group operating under a flawed risk management framework which did not adequately identify and mitigate risks to the group’s customers, causing consumer detriment.

Of significant concern to the FCA was that despite Ms Grigg’s awareness that the group’s business model posed an increased risk to customers because it afforded the group’s ARs and CF30s a high degree of flexibility and freedom as to how they could operate within the network, Ms Grigg failed to ensure the increased risks to customers were adequately addressed in the risk management framework. Ms Grigg’s conduct put approximately 26,750 customers at risk of poor outcomes, including the risk of receiving unsuitable advice from the group’s ARs and CF30s.

The action taken against Ms Grigg is final as she has not referred her case to the tribunal.

Notes for editors

  1. The decision notice for Mr Charles Anthony Llewellen Palmer
  2. The final notice for Ms Paivi Katriina Grigg
  3. The FCA has taken enforcement action in respect of related failings at the group, including against Financial Ltd and Investments Ltd and Mr Stephen Bell, the group’s former Compliance Director       
  4. An appointed representative (AR) is a person or firm who conducts regulated activities and acts as an agent for a firm directly authorised by the FCA. The directly authorised firm is known as the AR’s ‘principal’. There must be a written contract between the principal and the AR documenting the arrangement. The principal takes full responsibility for ensuring that the AR complies with our rules. More information can be found on the FCA website
  5. On 1 April 2013, the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA)
  6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers
  7. You can find out more information about the FCA, as well as how it is different to the PRA

 

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