The FCA’s decision notices of 26 May in respect of three former members of Keydata Investment Services’ senior management, Stewart Ford, Mark Owen and Peter Johnson, have been referred to the upper tribunal.
In the context of the tortuous progress of this case and the seriousness of the FCA’s allegations, it is unsurprising that they are challenging their decision notices.
The stakes are high for both sides, which is reflected in the fact that Mr Ford is facing possibly the largest fine the FCA has ever imposed on an individual. This penalty is both a sign that the case is important to the FCA and also a significant incentive for Mr Ford to contest it. Consequently both sides are fighting this battle with all the weapons available to them, with the three individuals proving to be adept at thwarting the progress of the enforcement proceedings.
FSA investigators were appointed to investigate Keydata in December 2007, and formal investigation into the three individuals commenced in September 2008. In June 2009 Keydata was placed into administration by the FSA. Warning notices were subsequently issued to the individuals in October 2010. At this point, the matter was derailed by a judicial review brought by Mr Ford.
The administrative court decided to uphold Mr Ford’s challenge in October 2011 on the basis that the FSA had improperly relied upon material which was covered by legal professional privilege. The court later (in April 2012) delivered a second judgment outlining what the FSA needed to do to prevent the inappropriate use and wider dissemination of the privileged material, and whether the case could proceed against the three individuals. The court ultimately decided that it could proceed and so the FSA was, again, free to continue with the disciplinary proceedings after an 18-month hiatus.
There was then a further delay of over two years. This delay was due in part to a further challenge to the regulator by the individuals concerning publicity; whatever other causes for the delay that there may have been in this time are unclear. At the conclusion of the FCA’s recent press release the regulator commented that Messrs Ford, Johnson and Owen had “applied unsuccessfully to the tribunal for an order preventing the FCA from publishing their decision notices”. While the three may have been unsuccessful in preventing their publication, it is apparent from the fact that the notices were each issued on 7 November 2014 that they were quite successful in further delaying the FCA’s case against them.
It is hard to guess at whatever additional twists and turns there may still be in this case. However, in contrast to the FCA’s enforcement processes, the proceedings before the tribunal are in public, and so it should be clearer as and when additional delays arise.
It is likely that the individuals will contest every potential point at the tribunal hearing, which will consequently drag on longer than would otherwise be the case. Furthermore, Mr Ford has announced his intention to bring a civil action against the regulator and at least one third party. It seems likely that efforts will be made to thereby delay the tribunal either by seeking adjournments of the tribunal proceedings or through the simple fact that a civil case will draw attention and resource away from the enforcement case.