Release Date: 30th March 2017
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Christopher Niehaus, a former managing director in the Investment Banking division at Jefferies International Limited, £37,198 for sharing confidential client information over WhatsApp. Mr Niehaus’s actions were deemed to have failed to meet the required standards of due skill, care, and diligence.
Between 24 January and 16 May 2016, Mr Niehaus shared confidential information received during his employment with both a personal acquaintance and a friend, who was also a client of Jefferies. This information included the identity of the client, details of the client mandate, and the fees Jefferies would charge. The information was shared to impress these individuals and included details about a competitor, as well as boasting about potential financial gains from the deals.
Despite the confidential information shared, neither Mr Niehaus nor the recipients engaged in any securities transactions related to these disclosures. It was accepted that Mr Niehaus did not share the information with the expectation of financial dealing.
Mr Niehaus was suspended from Jefferies during the disciplinary process and resigned before its conclusion. He provided full admissions in an early interview with the FCA, resulting in a 15% reduction in the financial penalty. He also settled during the stage 1 settlement period, without which the penalty would have been £53,140.
Key Takeaways for Other Firms:
- Confidentiality: Ensure that all employees understand the importance of maintaining client confidentiality.
- Instant Messaging: Implement strict policies regarding the use of instant messaging applications for sharing sensitive information.
- Compliance Training: Regularly train staff on compliance, especially regarding the handling of confidential information.
- Monitoring: Establish robust monitoring systems to detect and prevent unauthorised sharing of information.
- Disciplinary Actions: Be prepared to take swift disciplinary actions against employees who breach confidentiality rules.
In conclusion, the FCA’s fine on Christopher Niehaus highlights the serious consequences of failing to protect client confidentiality. Firms must reinforce the importance of maintaining confidentiality and ensure strict adherence to compliance policies to avoid similar penalties.
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