Release Date: 13th March 2015
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Stephen Bell, former compliance director of network Financial Group, £33,800 for significant weaknesses in the design and execution of the Group’s compliance systems and controls. Mr Bell has also been banned from performing the compliance oversight function.
Key Points:
- Fined Individual: Stephen Bell, former compliance director of network Financial Group
- Fine Amount: £33,800
- Reason for Fine: Systemic weaknesses in compliance systems and controls related to recruitment, training, monitoring, and control of ARs and CF30s
- Ban: Prohibited from performing compliance oversight function
Misconduct Details:
- Responsibilities: Between 20 August 2008 and 16 January 2013, Mr Bell was responsible for the compliance systems and controls at the firms.
- Systemic Weaknesses: Inadequate systems and controls for recruitment, training, monitoring, and controlling appointed representatives (ARs) and CF30s. Compliance and file-checking processes failed to adequately identify and assess risks.
- Notification of Failings: Despite being put on notice about the need for significant improvements, Mr Bell did not ensure the necessary changes were implemented.
FCA’s Position:
Georgina Philippou, acting director of enforcement and market oversight at the FCA, emphasised the critical role of compliance directors in ensuring robust systems and controls to minimise the risk of mis-selling and unsuitable advice. She highlighted the seriousness of Mr Bell’s failings, given his awareness of the needed improvements.
Cooperation and Penalties:
- Early Settlement: Mr Bell agreed to settle early, receiving a 30% discount on his fine.
- Penalties Without Discount: The fine would have been £48,389 without the discount.
Key Takeaways for Other Firms:
- Robust Compliance Systems: Ensure strong systems and controls for recruitment, training, monitoring, and controlling staff.
- Proactive Risk Management: Regularly review and improve compliance and file-checking processes to effectively identify and assess risks.
- Responsibility of Compliance Directors: Compliance directors must actively oversee and implement necessary changes to maintain regulatory standards.
- Prompt Remediation: Address any identified weaknesses promptly to avoid regulatory penalties.
Conclusion:
The FCA’s action against Stephen Bell serves as a reminder of the importance of robust compliance frameworks and proactive management of compliance functions within financial firms to ensure consumer protection and market integrity.
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