The Financial Conduct Authority (FCA) has fined former compliance director Mr Stephen Bell £33,800 for systemic weaknesses in the design and execution of network Financial Group’s (the Group) compliance systems and controls. The FCA has also banned Mr Bell from performing the compliance oversight function.
Between 20 August 2008 and 16 January 2013, Mr Bell was responsible for compliance systems and controls at the firms. The FCA found that Mr Bell designed and implemented the firms’ systems and controls and was therefore knowingly concerned in the firms’ breaches - set out in Final Notices issued against the firms on 23 July 2014.
Of significant concern to the FCA was the firms’ inadequate systems and controls relating to the recruitment, training, monitoring and control of its ARs and CF30s and the firms’ compliance and file checking processes which did not adequately identify and assess risks. Mr Bell was responsible for compliance oversight generally and had knowledge of and responsibility for the design and implementation of the controls at the firms.
Georgina Philippou, the FCA’s acting director of enforcement and market oversight Division, said:
"This action shows that a compliance director of a network has an important role in terms of ensuring that systems and controls across the network are focussed on minimising the risk of mis-selling and the provision of unsuitable advice to consumers. We view Mr Bell’s failings as particularly serious because he had been put on notice of the need for significant improvements in the firms’ systems and controls and compliance. The network model is undermined if the senior managers of the principle firm do not carry out their responsibilities."
Mr Bell agreed to settle the case at an early stage of the investigation and therefore qualified for a 30% discount. Without the discount the FCA would have fined Mr Bell £48,389.
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