Cleon Catsambis represented a prominent accountant in regulatory proceedings brought by the Financial Conduct Authority (FCA), in a case which has been described by industry experts in the Financial Times as a “game-changer”.
The FCA Enforcement division sought a Prohibition Order against Mr David Watters, alleging that he failed to act with due skill, care and diligence in exercising his CF10 compliance oversight function. The context was that, on advice from Mr Watters’ firm, about 500 clients transferred their pensions from direct benefit to direct contribution schemes between 2006 and 2009, with an aggregate value of approximately £12.7 million.
Mr Watters accepted, on reflection, that there were areas in the Enhanced Transfer Value advice process that could have been improved. However, he maintained that the firm’s process was compliant with the regulatory requirements in force at that time and that he was a fit and proper person to hold the CF10 controlled function.
Having considered written and oral representations on Mr Watters’ behalf, the FCA’s Regulatory Decisions Committee (RDC) decided to fine Mr Watters £75,000 but dismissed the FCA’s application for a Prohibition Order. The RDC found that the breaches were neither deliberate nor reckless and that there was no lack of integrity on the part of Mr Watters.
This decision is significant because it demonstrates the FCA’s willingness to pursue senior individuals for a firm’s non-compliant advice process.
The Final Notice can be found here.
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