17 September 2013

FCA fines and bans two individuals involved in the promotion of UCIS


Harvey Knight
Partner | UK

As a timely reminder to ensure firms are assessing the suitability of their products to customers before promoting them, the FCA has published two final notices, fining two individuals John Leslie and Jeffery Bennett £28,000 each and banned them from performing accountable significant influence functions for failing to monitor the promotion of unregulated collective investment schemes (UCIS).

During 2005, both firms were involved in the promotion of three UCIS to UK retail investors. Around 880 people invested around €38 million in the UCIS on a non-advised basis. The UCIS subsequently failed, and the investors’ original investments are now likely to be worthless. Mr Leslie and Mr Bennett were responsible for overseeing the regulated activities of their respective firms, and monitoring compliance with legal and regulatory requirements. The FCA found that both individuals failed to adequately discharge their responsibilty to control the distribution of prospectuses for the UCIS to retail investors. They did not identify the extent to which their firms were involved in promoting the UCIS, and they failed to detect the risk that the UCIS were routinely being promoted to ineligible consumers. As a result, they both failed to exercise due skill, care and diligence in their positions, in breach of Principle 6 of the Statements of Principle and Code of Conduct for Approved Persons (APER).

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