The Financial Services Authority (FSA) has fined the director of a West Midlands financial adviser firm £75,000 for lying repeatedly to the regulator, and banned him from the industry.
Simon Kuun ran MFP Group Plc (MFP), a financial planning firm in Bromsgrove, but an FSA investigation in 2008 found that he lacked the honesty and integrity expected of an approved person. He was fined £50,000.
The case was then referred to the Financial Services and Markets Tribunal (Tribunal), who upheld the FSA's original findings, but increased the fine to £75,000 as Kuun also lied to the Tribunal when giving evidence.
Kuun first came to the FSA's attention during a supervisory visit to MFP in 2005. He told the FSA that his business had stopped using unapproved and unqualified staff to visit customers. In fact, the opposite was true. He had simply transferred their contracts to a company called Membership Services Limited (MSL), which was registered in the West Indies.
Kuun denied any involvement with the firm, maintaining that MSL was owned and run in Switzerland by an acquaintance called John Graham.
However, an investigation found that Kuun himself was the subscriber who paid for MSL's mailbox address in Switzerland, and that any post addressed to MSL was forwarded back to MFP's office in Bromsgrove.
The Tribunal agreed with the FSA that there was no credible evidence to suggest that John Graham actually existed, and that Kuun had invented him to mislead both the FSA and the Tribunal in their investigations using his own middle names.
The Tribunal found that Kuun had demonstrated a lack of honesty and integrity contrary to Principle 1 of the Statement of Principles for Approved Persons, and had also failed to be open, candid and truthful with the FSA contrary to statements in Principle 4. It was also found that he is not a fit and proper person to perform any function in relation to any regulated activity.
As Kuun was the sole shareholder of MFP and is therefore MFP's sole controller for the purposes of the FSA's rules, the business will cease to operate.
Margaret Cole, FSA director of enforcement and financial crime division, said:
"We could not allow this dishonesty by Kuun to go unpunished. It was a premeditated and sustained attempt to deceive the FSA and prevent effective regulation.
"This and other recently published cases, such as Pak Property Centre and Aston Sterling Insurance Services Limited, show our determination to exclude dishonest people from the industry, including those who believe it is acceptable to lie to regulatory authorities in order to conceal their criminality and other wrong doing."
Notes
Simon Kuun ran MFP Group Plc (MFP), a financial planning firm in Bromsgrove, but an FSA investigation in 2008 found that he lacked the honesty and integrity expected of an approved person. He was fined £50,000.
The case was then referred to the Financial Services and Markets Tribunal (Tribunal), who upheld the FSA's original findings, but increased the fine to £75,000 as Kuun also lied to the Tribunal when giving evidence.
Kuun first came to the FSA's attention during a supervisory visit to MFP in 2005. He told the FSA that his business had stopped using unapproved and unqualified staff to visit customers. In fact, the opposite was true. He had simply transferred their contracts to a company called Membership Services Limited (MSL), which was registered in the West Indies.
Kuun denied any involvement with the firm, maintaining that MSL was owned and run in Switzerland by an acquaintance called John Graham.
However, an investigation found that Kuun himself was the subscriber who paid for MSL's mailbox address in Switzerland, and that any post addressed to MSL was forwarded back to MFP's office in Bromsgrove.
The Tribunal agreed with the FSA that there was no credible evidence to suggest that John Graham actually existed, and that Kuun had invented him to mislead both the FSA and the Tribunal in their investigations using his own middle names.
The Tribunal found that Kuun had demonstrated a lack of honesty and integrity contrary to Principle 1 of the Statement of Principles for Approved Persons, and had also failed to be open, candid and truthful with the FSA contrary to statements in Principle 4. It was also found that he is not a fit and proper person to perform any function in relation to any regulated activity.
As Kuun was the sole shareholder of MFP and is therefore MFP's sole controller for the purposes of the FSA's rules, the business will cease to operate.
Margaret Cole, FSA director of enforcement and financial crime division, said:
"We could not allow this dishonesty by Kuun to go unpunished. It was a premeditated and sustained attempt to deceive the FSA and prevent effective regulation.
"This and other recently published cases, such as Pak Property Centre and Aston Sterling Insurance Services Limited, show our determination to exclude dishonest people from the industry, including those who believe it is acceptable to lie to regulatory authorities in order to conceal their criminality and other wrong doing."
Notes
- The Final Notices for Simon Kuun and MFP Group plc.
- Key finding from the Tribunal - effective regulation of authorised firms and approved persons requires the proactive cooperation of persons dealing with the FSA. To be able to achieve its statutory objectives, the FSA needs to acquire an understanding of the business. The regulatory system is dependent upon persons cooperating with the FSA. The FSA has 17,000 other small firms to supervise and the system of regulation would break down if each firm or its directors acted in the manner in which Kuun and MFP have acted in this case.
- The Tribunal decision can be found here.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
No comments:
Post a Comment