Release Date: 1st February 2016
To access the original FCA document, click here.
Summary
The FCA fined Millburn Insurance Company Limited £1,137,500 for breaching Principle 11, which mandates open and cooperative dealings with the regulator. During the period from 3 January 2013 to 9 August 2013, Millburn failed to disclose material information regarding a reinsurance treaty with Balva Insurance Company and provided misleading responses to the FCA. These actions, influenced by Shay Jacob Reches and involving Millburn’s CEO Colin McIntosh, aimed to avoid regulatory scrutiny and concealed significant failings in the company’s systems and controls. The penalty was reduced by 30% for early settlement from the original £1,625,000.
Key Takeaways for Other Firms:
- Full Disclosure: Always provide complete and truthful information to the FCA.
- Regulatory Compliance: Ensure all business activities fall within your authorised permissions.
- Effective Oversight: Maintain robust internal controls to prevent unauthorised actions by individuals.
- Transparent Communication: Cooperate openly with the FCA, especially when clarifications or investigations are ongoing.
- Responsibility of Leadership: CEOs and senior managers must ensure compliance and integrity in all dealings with the FCA.
Conclusion:
This case underscores the importance of maintaining transparency and integrity in all interactions with regulatory bodies. Firms must ensure robust internal controls and oversight, particularly regarding the actions of senior management, to avoid severe penalties and protect consumer interests. Adherence to regulatory requirements and open communication with authorities are paramount to maintaining the integrity of the financial system and safeguarding consumers.
