FCA fines and bans ex-director and compliance officer

FCA fines and bans ex-director and compliance officer

On 13th February 2024 the UK Financial Conduct Authority (“FCA”) announced that it had fined Floris Jackobus Huisamen, a former director and compliance officer of London Capital and Finance PLC (“LCF”) £31,800 (after applying a 30% discount for settlement) and banned him from working in financial services. Mr Huisamen was found to have recklessly signed off hundreds of financial promotions, something which the FCA stated had contributed to thousands of investors being misled by LCF. This is because the promotions made the mini bonds look like a far more attractive investment than they were.

A “tick box” process

The FCA asserted that Mr Huisamen should have ensured that LCF’s financial promotions were fair, clear and not misleading. Instead, the “systems and controls” operated by the firm during his tenure as Controlled Function 1 (director) and 10 (compliance officer) between 13th June 2017 – 1st February 2019 were, in general, revealed to be little more than a “tick box process”.  This meant:

  • consumers did not receive adequate insights into the potential risks associated with mini bonds prior to investing;
  • certain charging structures were hidden or difficult for investors to discern;
  • the firm failed to obtain evidence to support the claims being made in the financial promotions;
  • little, or no, challenge was offered to senior management prior to the issuance of non-compliant financial promotions, even when Mr Huisamen had concerns about LCF’s strategy; and
  • Mr Huisamen kept signing off financial promotions despite being aware that they contained inaccurate claims.

Need help?

C&G’s consultants have extensive experience of reviewing and approving financial promotions for firms active in offering investment and payment services business products. Please contact us if you are interested in obtaining external assurance over the effectiveness of your firm’s systems and controls for approving financial promotions.

References

  1. FCA bans and fines Floris Jakobus Huisamen over London Capital & Finance plc financial promotions. Financial Conduct Authority, available at: https://www.fca.org.uk/news/press-releases/fca-bans-and-fines-floris-jakobus-huisamen-over-london-capital-finance-plc-financial-promotions (last accessed 2nd March 2024).

Alexander Culley

Alexander Culley

Alexander Culley

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