An upper tribunal judge has sided with the Financial Conduct Authority’s decision to ban an independent financial adviser convicted of grooming a 15-year-old girl, but highlighted a number of flaws in the regulator's handling of the case.
Judge Timothy Herrington found the FCA's decision to ban Jon Frensham from operating as an adviser was justified based on his conviction and subsequent behaviour.
However, the tribunal highlighted the regulator's lack of diligence in following up with Frensham after it became aware of his conviction, its putting forward of witnesses who were "not properly prepared", and its reluctance to take a stance on the case for years.
The FCA banned Jon Frensham from operating as an adviser in October 2020, more than three years after he was convicted for attempting to meet a child.
The sole director of Frensham Wealth - who was formerly known as Jonathan James Hunt - received a 22-month jail sentence in March 2017, of which 18 months were suspended. He was first arrested a year before his conviction, in March 2016.
Whilst operating as an approved adviser, Frensham had messaged a girl called ‘Holly’, who early on told him she was, in fact, only 15 years old.
The judge said “many” of Frensham’s messages were “sexual in tone”, and that he wanted a photo of her in her school uniform.
When Frensham met Holly, she turned out to be an adult who had tricked him, leading to his arrest.
He was already on bail at this time, having been arrested for another suspected offence - though no charges were brought.
As part of his conviction, Frensham was added to the sex offenders register until 2027.
Following his conviction, the Chartered Insurance Institute refused to renew Frensham’s Statement of Professional Standing, meaning he was unable to continue trading.
But according to the tribunal, which sat in mid-June, Frensham “failed to inform” the FCA of this, which meant he continued trading without a SPS for more than three years.
The FCA later discovered his conviction “from other sources”.
Whilst the tribunal heard that “Frensham decided to put his own interests and those of the firm before the need to comply with the clear obligations to be open and transparent with the FCA,” it also said the financial watchdog “was not as diligent as it should have been in following up with Frensham after it became aware of those matters”.
The tribunal accused the FCA of being “reluctant” for its position to be known on the Frensham case, with regards to taking regulatory action based on non-financial misconduct, which would have led to the delayed ban.
According to one FCA employee it was that it considered convictions for non-financial misconduct indicative of an individual’s lack of integrity.
“That did not appear to be the settled position at the time the FCA became aware of Frensham’s conviction. That only became apparent after a long period of reflection, and it appears that the FCA was reluctant for it to be known that that was the position,” the hearing stated.