Release Date: 12th October 2017
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has banned Mrs Colette Chiesa and Mr John Chiesa from working in financial services due to integrity failings. Additionally, Mrs Chiesa was fined £50,000 for attempting to mislead the FCA during an interview.
Mr and Mrs Chiesa were founding partners of Westwood Independent Financial Planners (Westwood), authorised to provide personal investment advice. In 2011, the FCA took action against Westwood for mis-selling geared traded endowment policies (GTEP products), leading to the firm’s insolvency and sequestration (bankruptcy in Scotland).
Mr and Mrs Chiesa made inadequate and misleading disclosures to their Trustee about their financial situation during sequestration to avoid asset recovery for creditor benefit. They failed to disclose their beneficial interest in an unregulated company capable of paying over £1 million per year into an offshore trust, which paid them approximately £2.6 million between April 2012 and December 2014. Additionally, the company covered their significant personal and living expenses.
Despite these substantial incomes, the Chiesas only paid £200 per month towards their creditors, while customers who lost money due to Westwood’s mis-selling were compensated by the Financial Services Compensation Scheme (FSCS), which had paid out over £3.8 million by late 2016. Mark Steward, Executive Director of Enforcement and Market Oversight, remarked that their misconduct demonstrated a serious lack of integrity.
Key Takeaways for Other Firms:
- Integrity and Transparency: Always act with integrity and provide full disclosure of financial interests and benefits.
- Accurate Reporting: Ensure all disclosures to trustees or regulatory bodies are complete and accurate.
- Accountability: Be accountable for all actions, especially during financial difficulties, to maintain trust and credibility.
In conclusion, the FCA’s action against Mr and Mrs Chiesa highlights the critical importance of integrity and transparency in financial services. Firms and individuals must adhere strictly to regulatory standards to avoid severe penalties and bans.
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