In August 2013 the FCA decided to fine Timothy Roberts £450,000 and impose a full prohibition on him, and to fine Andrew Wilkins £100,000 and prohibit him from undertaking significant influence functions. Mr Roberts and Mr Wilkins referred the FCA’s decisions to the Tribunal, leading to the Tribunal’s judgment.
The Tribunal upheld the fine of £450,000 and prohibited Mr Roberts from performing any role in regulated financial services. The Tribunal also decided to fine Mr Wilkins £50,000.
Catalyst was a UK distributor of bonds issued by Luxembourg-based life settlement vehicle ARM Asset Backed Securities.
ARM understood that it needed a licence to issue bonds from the Luxembourg regulator, but did not have one. In November 2009, ARM was requested by the Luxembourg regulator to cease issuing bonds until it was granted a licence.
Mr Roberts allowed Catalyst to continue promoting the bonds and collecting funds from potential investors after November 2009 in circumstances where the funds collected from potential investors were not ring fenced so that they could be paid back if ARM was refused a licence.
The Tribunal and the FCA found that Mr Roberts and Mr Wilkins allowed Catalyst to provide misleading information about ARM’s licence position in a letter to IFAs in December 2009. Mr Roberts also approved a letter to investors containing misleading information about ARM’s licence position in March 2010.
The Tribunal found that Mr Roberts’ conduct demonstrated a reckless disregard for the interests of investors, and considered the degree to which Mr Roberts acted with a lack of integrity to be serious. The Tribunal also found that Mr Roberts had acted without due care, skill and diligence in approving ARM’s financial promotions which failed to disclose to investors significant information relating to ARM’s regulatory position. The Tribunal agreed with the FCA’s decision to impose a prohibition order on Mr Roberts.
The Tribunal agreed with the FCA’s decision that Mr Wilkins had acted without due care, skill and diligence. However, the Tribunal rejected the FCA’s argument that Mr Wilkins had acted recklessly and without integrity. The Tribunal has referred the FCA’s decision to prohibit him from holding significant influence functions back to the FCA to reconsider whether any kind of prohibition should be imposed on Mr Wilkins in light of the findings of the Tribunal.
The Tribunal also found that contrary to the FCA’s decision, Mr Roberts and Mr Wilkins did take reasonable steps to keep Catalyst’s compliance officer informed of ARM’s licence position prior to 24 December 2009.
