Tribunal upholds the Financial Conduct Authority’s decision to fine investment adviser

On 21 May 2015 the Tribunal upheld the Authority’s decision to impose a financial penalty of £10,000 on Mr Rosier, the director of a financial advice firm called Bayliss & Co (Financial Services) Limited.

The Tribunal has also dismissed Mr Rosier’s arguments against the imposition of a prohibition order. The FCA will therefore prohibit Mr Rosier from performing significant influence functions. In reaching this decision, the Tribunal upheld all but one of the FCA’s findings.

The Tribunal’s decision was issued following a hearing during October 2014. It remains open to the parties to appeal this decision.

The Tribunal made a number of findings that Mr Rosier failed to comply with his regulatory obligations, including:   

  1. failings in respect of gathering client information and producing suitability reports such that Bayliss was unable to demonstrate the suitability of the recommendations it made to its clients;
  2. failure to respond to client complaints appropriately; and
  3. failure to have regard to the statutory and regulatory provisions regarding the promotion of unregulated collective investment schemes (UCIS). As a result, Mr Rosier did not take reasonable steps to demonstrate that the advice given to investors in relation to UCIS was suitable for them.

The Tribunal also found that Mr Rosier’s breaches demonstrated systemic and cultural failings in the way he managed Bayliss’ business and dealt with its clients as well as a dismissive approach to the importance of compliance with the Authority’s regulatory standards.

The Tribunal found there would be a risk to investors if Mr Rosier was permitted to perform a significant influence function.

In this decision, the Tribunal makes a number of criticisms of the FCA’s handling of this case, including the submission of late evidence and in the handling of a press statement.

When the FCA published the Decision Notices in this case, they were sent by email to a small number of media outlets with a short statement. This statement contained a number of inaccuracies, including a headline and quote that did not accurately reflect the findings in the Decision Notices, failed at its beginning to emphasise the provisional nature of the Decision Notices and did not comply with the protocol set out previously by the Tribunal. This protocol requires us to make clear that the matter has been referred to the Tribunal so that the subjects can present their case and the Tribunal can determine the appropriate action, and to make it clear that our findings reflect our belief as to what happened.

We have apologised to Mr Rosier, reviewed our processes to prevent this happening again, have already taken forward some of the recommendations in the Tribunal’s decision and will take forward the rest.