The day before the FCA revealed the findings of the Davis Report into how it handled sensitive information about the insurance industry, its chief executive Martin Wheatley declared a potential conflict of interest.
Board meeting minutes dated 9 December - the day before the independent Davis Inquiry Report was published - show that Mr Wheatley said he had been “involved in the events of 28 March 2014”.
Along with financial adviser Amanda Davidson, who said she had a potential conflict of interest as she was involved in a regulated firm that helped to fund the FCA (director of London-based Baigrie Davies), Mr Wheatley was allowed to participate in the discussion of the matter.
But according to the minutes, he was not allowed to vote on any of the decisions that the Board was required to make.
During the meeting, the board of the FCA also reviewed a paper which, the minutes stated, “considered in the light of the conclusions of the Davis Report, whether any further investigation should be undertaken as to whether market abuse was committed by any person in respect of the events of 27 and 28 March 2014”.
The notes added: “The board, with Mr Wheatley recusing himself from voting, having considered the matters laid out in the paper, and on the basis of facts currently known, agreed that the FCA should not commence nor appoint anyone else to commence, an investigation into whether or not any market abuse as a result of improper disclosure occured on 27 and 28 March 2014.”
On 8 April 2014 the FCA’s non-executive directors appointed Simon Davis of Clifford Chance to conduct an independent inquiry into the handling of the FCA’s announcement of proposed supervisory work on the fair treatment of long-standing life insurance customers.
This happened after comments attributed to Clive Adamson, formerly of the FCA, were quoted in a media article ahead of the publication of the FCA’s 2014 to 2015 business plan. This caused an immediate concern that life insurers were to face strict censure, causing companies share prices to nosedive on the news.
The 226-page Davis Report was highly critical, claiming that the regulator had handled the press briefing inadequately. Following this, the Treasury select committee held a meeting with the head of the ABI, Otto Thoresen, and Graham Beale, chairman of the FCA’s practitioner panel, who claimed that the FCA was “immature”.
In December, Clive Adamson, who was in charge of supervising regulated companies, communications director Zitah McMillan and authorisations director Victoria Raffé announced their departures from the FCA.