FSA fines firm £20,000 for not seeking approval for individual
The seriousness of the failing was reinforced by the fact that the employee had previous convictions for fraud and is also alleged to have perpetrated various frauds while he was employed within the Besso group. Had the FSA received an application for approval, the previous convictions could have been detected at an earlier stage and the fraudulent behaviour may have been prevented. The current allegations are the subject of a police investigation.
The FSA recognises that Besso's failure to submit an application for approval in respect of this employee was an isolated example of failure to comply with the requirements of the Financial Services and Market Act. However, the FSA regards compliance with these requirements as vitally important for the fulfilment of its objectives, in particular those of securing the protection of consumers, reducing financial crime and maintaining confidence in the UK financial system.
Margaret Cole, FSA director for enforcement, said: “This case visibly illustrates the potential risks that can arise where firms fail to follow the correct regulatory procedures. It is very important for firms to submit applications for approval at the right time and in the proper way. If Besso had acted correctly the current alleged fraud could perhaps have been avoided. Other firms should take heed.”
The FSA acknowledged the prompt and decisive remedial action taken by Besso on discovery of the employee's misconduct, and commends Besso for its co-operation with the FSA throughout. Were it not for these factors, the financial penalty would have been higher.
This is the first time the FSA has settled a case at stage one of the new enforcement procedures and as a result it is also the first time it has implemented the fine discount scheme for early payment. Firms that settle at this stage receive a 30 per cent reduction.