Final Decision on Two FSA Notices Lies in Tribunal
For the first time under the power granted to it by parliament in 2010, the Financial Services Authority (FSA) has issued two decision notices for enforcement that have been referred to the Upper Tribunal.
In April 2010 the Financial Services Act 2010 amended section 391 of the Financial Services and Markets Act 2000 giving the FSA the power to publish decision notices. This power was then activated in October 2010.
The FSA, Stuart Unwin and Derek Wright have already referred their cases to the Tribunal, after which they will present their cases for the Tribunal to rule on what actions the FSA may take against Unwin and Wright.
The Tribunal is expected to either uphold or dismiss the decision of FSA.
The FSA ruled in a decision notice dated March 2, 2011 that Unwin may no longer hold a significant influence function (SIF) on grounds that he has no capability for such function.
The FSA believed Unwin bungled in ensuring that his company had adequate systems and controls to ensure that occupational pension transfer advice given by his firm was suitable and signed off by a pension transfer specialist.
Unwin was previously warned by the FSA to do this but failed to according to the financial regulator.
In the decision notice, the FSA claimed that Unwin delegated compliance responsibilities to an individual incapable of handling the matter, adding that he failed to look into the quality of the individual’s performance.
This was in addition to Unwin’s failure to ensure the effective monitoring of his sales staff, including trainee advisers, the FSA said.
Meanwhile, the FSA prohibited Wright from all regulated activity in a decision notice dated February 23, 2011, on grounds that he was reluctant to comply with the FSA approved person regime.
According to the FSA, Wright provided misleading information to the FSA, thereby questioning his honesty, integrity and competence, which were among the grounds for the decision notice.
Wright allegedly arranged for wife Mary Wright to assume the roles approved by the FSA while he was running Moorgate Insurance Agencies Ltd, a small insurance broker.
This deprived Mrs Wright of any involvement in the running of Moorgate, failing to function properly as its director. Therefore, Mr Wright ran the business “unsupervised and unchallenged” by his wife, the FSA said.
A previous disciplinary action filed by Lloyds of London in 2001 against Mr Wright is considered by the FSA to be “a highly relevant factor in its assessment of his fitness if he applied for approved person status.”
The FSA further claimed that Mr Wright “produced poor quality regulatory returns and failed to ensure the firm had adequate resources.”