Release Date: 1st February 2016
To access the original FCA document, click here.
Summary
The FCA fined Shay Jacob Reches £1,050,000 and imposed an additional penalty of £13,130,000, prohibiting him from performing any function in relation to regulated activities. The penalties stem from his involvement in failed insurance schemes linked to companies like ERIC, Balva, and Millburn, leading to substantial claims against the Financial Services Compensation Scheme (FSCS). Reches was found to lack integrity and act recklessly by misdirecting insurance premiums, resulting in insurers’ inability to pay claims, contributing to their administration and significant liabilities for the FSCS.
Key Takeaways for Other Firms:
- Maintain Regulatory Compliance: Ensure all functions are performed with proper FCA approval to avoid penalties.
- Proper Fund Management: Direct insurance premiums appropriately to ensure funds are available to pay claims.
- Ensure Transparency and Integrity: Conduct business with transparency and integrity to maintain consumer trust and regulatory compliance.
- Avoid Recklessness: Recognize and mitigate risks to prevent reckless actions that could endanger the firm and its clients.
- Cooperate with Regulatory Bodies: Fully cooperate with FCA investigations to avoid further complications and demonstrate compliance.
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