Tribunal rules FCA fine too ‘excessive’

Tribunal rules FCA fine too ‘excessive’

The Upper Tribunal has judged that the Financial Conduct Authority was “wholly excessive” in its fine for non-executive Angela Burns, cutting her £154,800 penalty by 87 per cent

In May 2014, the former non-executive director lost her original Upper Tribunal challenge against a decision by the regulator to ban and fined her £154,800 for failing to disclose conflicts of interest in working with two mutuals.

However, earlier this month a tribunal decision found the penalty should be reduced to £20,000. The judge ruled Ms Burns’ regulatory ban should stay in place.

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The FCA had said a year earlier that Ms Burns could no longer perform any role in regulated financial services for failing to act with integrity as a non-executive director at the societies, MGM and Teachers.

Ms Burns denied the FCA’s allegations and again referred the matter to the tribunal, arguing the prohibition should be limited in scope and time, that there should be no financial penalty and that there should be reference to the losses and costs which she says she incurred.

In a second decision earlier this month, judge Andrew Bartlett made several changes to its suggestions for regulatory action.

“In our judgment the authority did not make a realistic reassessment of the position in the light of the fact that six out of its ten allegations failed and, out of the four which succeeded, three were upheld to only a limited extent,” he stated, adding that the tribunal found the FCA’s submissions to be unsatisfactory and unpersuasive in a number of respects.

These included the regulator painting a picture of misconduct over a period of two years, in contrast to the isolated instances (three days in February 2009 and one incident in November 2010) which the tribunal found to be established.

The FCA was also found to have incorrectly interpreted the tribunal’s decision as having held that Ms Burns improperly misused her position as a director to try to benefit herself.

“In the circumstances, we find ourselves in wholesale disagreement with the authority’s assessment of the level of seriousness of the proven breaches, and accordingly with the level of financial penalty arrived at by the authority,” said judge Bartlett.

“Furthermore, the authority’s contention that it would be appropriate to prohibit Ms Burns from carrying out any function in relation to any regulated activity rests on a more negative view of her conduct than that taken by the tribunal.”

The document read that it considered the penalty of £154,800 wholly excessive. “In all the circumstances, we consider that the appropriate level of penalty is £20,000,” stated the decision.

“This reflects the limited extent to which the allegations against Ms Burns were upheld, and contains a discount in recognition of the burden upon her and prejudice suffered through facing substantial allegations which we concluded were unfounded.”