Stuart Malcolm Forsyth v (1) The Financial Conduct Authority and (2) The Prudential Regulation Authority [2021] UKUT 0162 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Judge Timothy Herrington,Member Jo Neill,Member Peter Freeman |
| Neutral Citation | [2021] UKUT 0162 (TCC) |
| Subject Matter | 6 July 2021 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 06 July 2021 |
[2021] UKUT 0162 (TCC)
Case number: FS/2019/021 & 022
FINANCIAL SERVICES– whether Chief Executive of small insurer
demonstrated a lack of integrity in relation to issues arising out of his wife’s
employment by the insurer - Statement of Principle 1 of the FCA’s and
PRA’s Statements are of Principle for Approved Persons , Rule 1 FCA’s
Individual Conduct Rules and Individual Conduct Standard 1 PRA’s
Insurance Conduct Standards
Financial penalty - whether action to impose financial penalty partially
time-barred- whether financial penalty appropriate and if so appropriate
level of penalty - s 66 FSMA
Fitness and properness of director as approved person - prohibition order in
relation to all functions in relation to regulated activities - s 56 FSMA
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
STUART MALCOLM FORSYTH
Applicant
- and -
THE FINANCIAL CONDUCT AUTHORITY (1)
THE PRUDENTIAL REGULATION
AUTHORITY (2)
The Regulators
TRIBUNAL:
Judge Timothy Herrington
Member Jo Neill
Member Peter Freeman
2
Sitting in public at The Rolls Buildings, Royal Courts of Justice, London EC4 on
13, 14, 15, 16, & 21 April 2021
Andrew George QC, instructed by DAC Beachcroft LLP, Solicitors, for the
Applicant
Farhaz Khan and Teniola Onabanjo, Counsel, instructed by the Financial
Conduct Authority and The Prudential Regulation Authority, for the Regulators
© CROWN COPYRIGHT 2021
3
DECISION
Introduction and decisions referred
1. This decision concerns two references by Mr Stuart Forsyth (“Mr Forsyth”) as
follows. The first reference is in respect of a decision notice of The Financial Conduct
Authority (the “FCA”) dated 30 September 2019 (the “FCA Decision Notice”). The
second reference is in respect of a decision notice of The Prudential Regulation
Authority (the “PRA”) also dated 30 September 2019 (the “PRA Decision Notice”).
Both decision notices (together the “Decision Notices”) concern the same matters.
2. Pursuant to the FCA Decision Notice the FCA decided (i) to make an order,
pursuant to section 56 of the Financial Services and Markets Act 2000 (“FSMA”),
prohibiting Mr Forsyth from performing any function in relation to any regulated
activity carried on by an FCA-authorised person, or by an exempt person or exempt
professional firm in respect of any FCA-regulated activity and (ii) to impose, pursuant
to section 66 of FSMA, a financial penalty of £78,318 on Mr Forsyth.
3. Pursuant to the PRA Decision Notice the PRA decided (i) to make an order,
pursuant to section 56 of FSMA, prohibiting Mr Forsyth from performing any
function in relation to any regulated activity carried on by a PRA-authorised person,
or by an exempt person or exempt professional firm in relation to any PRA-regulated
activity carried on by that person and (ii) to impose, pursuant to section 66 of FSMA,
a financial penalty of £76,180 on Mr Forsyth.
4. The matters which are the subject of these references relate to the conduct of Mr
Forsyth in his capacity as the Chief Executive Officer (“CEO or Chief Executive”) of
a small mutual insurance firm, the Scottish Boatowners Mutual Insurance Association
(“SBMIA” or the “Association”). SBMIA was at all material times a mutual insurer
that was founded in 1918 by fishermen in the area of Buckie, Scotland. It
predominantly provided insurance for fishing vessels and associated insurance
products.
5. Both the FCA and PRA (together the “Regulators”) contend that during the period
19 February 2010 to 8 July 2016 (the “Relevant Period”) Mr Forsyth’s conduct
demonstrated a serious lack of integrity in breach of Statement of Principle 1
(Integrity) of the Regulators’ Statements of Principle for Approved Persons; Rule 1
(Integrity) of the FCA’s Individual Conduct Rules; and Individual Conduct Standard
1 (Integrity) of the PRA’s Insurance Conduct Standards. As summarised in the
Regulators’ Statement of Case on these references the Regulators say:
(1) From 2010, Mr Forsyth improperly allocated a substantial part of his
annual contractual bonuses to his wife Mrs Penelope Forsyth (“Mrs Forsyth”),
who was also employed by SBMIA during the Relevant Period.
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