The Financial Services Authority has told FTAdviser it has not taken - and will not be taking - disciplinary action against an employee who threatened staff at a firm with jail, despite the behaviour being found to be “unprofessional” and “aggressive” by the Complaints Commissioner.
Last week the FSA publicly apologised for the conduct of several employees when Complaints Commissioner Sir Anthony Holland upheld five complaints from a regulated company following an “ambush” meeting with the regulator.
The meeting was ostensibly organised to discuss general requirements of companies submitting suspicious transaction reports, but in reality the FSA was considering action against the firm and wanted to quiz employees about why it hadn’t submitted a specific report.
One FSA employee, referred to as ‘person B’ and understood to be a technical specialist dealing with STR submissions, repeatedly asked why the company had not submitted the STR and at one point said “we have put people in jail for less”.
Failure to submit such a report is not, itself, a criminal act.
That company, revealed later to be oil investment broker PVM Oil Futures, brought the case to the Complaints Commissioner after an internal investigation by the FSA did not uphold any of the complaints.
In fact, the internal investigation instead alleged inappropriate behaviour from PVM’s lawyer, Sara George, a partner at Stephenson Harwood and previously a prosecutor in the FSA’s enforcement division from 2002 to 2006.
Ms George said in a statement: “The FSA initially exonerated itself in its own internal investigation without apparently having reviewed even its own internal email correspondence.
“This must inevitably undermine public confidence in the reliability of its complaints handling process. Its unwillingness to scrutinise its own actions combined with the ease with which it proceeded to make allegations of professional misconduct against me for questioning its powers is astonishing.”
Despite having all five complaints upheld by Sir Anthony and itself issuing a public apology, a spokesperson for the regulator confirmed to FTAdviser that there would be no steps taken to discipline person B because his actions did not contravene the FSA employee handbook.
Robin Bieber, managing director of PVM Oil Futures Limited, said in a statement: “The management team of PVM is distressed and disappointed by the values and attitudes demonstrated by the FSA’s internal correspondence and the FSA’s conduct towards us.
“We were clearly the subject of bullying and unethical behaviour by a regulator, the full extent of which was only made clear after our prompting the CC to revisit certain issues after his initial investigation.”
Read the full FSA apology here.
