Release Date: 1st February 2016
To access the original FCA document, click here.
Summary
Wayne Anthony Redgrave was fined £38,600 by the FCA for failing to exercise due skill, care, and diligence while managing Bar Professions Limited. The penalty stems from his negligent conduct in arranging insurance cover and providing misleading information to clients.
Key points of the case:
- Failure to Conduct Due Diligence: Mr Redgrave did not ensure that proper due diligence was performed before sending a letter to over 1,300 solicitor clients. This letter induced clients to enter into contracts based on misleading information, stating that Bar had secured replacement insurance with Berliner Versicherung Aktiengesellschaft, which was not true at the time.
- Misleading Communications: The letter claimed that insurance cover with Berliner was arranged and in place, which it was not. Additionally, the insurance policy limits mentioned were inaccurate.
- Neglect of Regulatory Responsibilities: Mr Redgrave breached FCA’s Statement of Principle 6 by not ensuring the accuracy of communications and failing to exercise proper care in managing Bar’s business.
Key takeaways for other firms to avoid similar issues:
- Conduct Thorough Due Diligence: Ensure that all necessary agreements and authorisations are in place before communicating with clients.
- Provide Accurate Information: Communications with clients must be clear, fair, and not misleading.
- Exercise Proper Oversight: Senior management must take full responsibility for the firm’s compliance with regulatory standards.
- Understand and Mitigate Risks: Be aware of potential conflicts of interest and ensure that adequate measures are in place to address them.
- Regulatory Cooperation: Always cooperate fully and transparently with regulatory bodies.
In conclusion, this case underscores the importance of diligence, accurate communication, and thorough oversight in managing insurance firms. Firms must take proactive steps to ensure compliance and protect consumer interests to avoid significant penalties and reputational damage.
Back to the Dear CEO letter archives.