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.
Notes to editors
- The Final Notice for Financial Ltd and Investments Ltd.
- 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.
- On 1 April 2013, the FCA became responsible for the conduct and supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).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.
- Find out more information about the FCA.