SEE FINAL NOTICE ISSUED ON 14 JUNE 2012

DECISION NOTICE

FSA Ref No:
300557

TAKE NOTICE: The Financial Services Authority of 25 The North Colonnade, Canary
Wharf, London E14 5HS (the “FSA”) has decided to take the following action:

1.
ACTION

1.1.
For the reasons listed below and pursuant to section 45 of the Financial Services and
Markets Act 2000 (the “Act”), the FSA has decided to cancel the permission granted
to Athanass Stefanopoulos (“Mr Stefanopoulos”), pursuant to Part IV of the Act (“his
Part IV permission”).

2.
REASONS FOR ACTION

2.1.
The FSA has concluded, on the basis of the facts and matters described below, that Mr
Stefanopoulos is failing to satisfy the threshold conditions set out in Schedule 6 to the
Act (“the Act”) (“the Threshold Conditions”). The FSA is not satisfied that the
resources of Mr Stefanopoulos are adequate in relation to the regulated activities he
carries on, as required by Threshold Condition 4 (Adequate resources). Neither is it
satisfied that he is a fit and proper person having regard to all the circumstances,
including the need to ensure that his business is conducted soundly and prudently and
in compliance with proper standards, as required by Threshold Condition 5
(Suitability).

2

2.2.
Specifically, the FSA is not satisfied that Mr Stefanopoulos is able to meet, or that
there is a realistic possibility that he will be able to meet, the obligations of his
business having regard to all the circumstances, including:

(1)
his repeated failure to pay promptly fees and levies owed to the FSA since
August 2005;

(2)
his failure to comply with the terms of a Settlement Agreement that he entered
into with the FSA on 17 February 2009 (“the Agreement”), whereby Mr
Stefanopoulos undertook to pay his the next two sets of periodic fees and
levies by the due date, failing which he would apply for the cancellation of his
Part IV permission;

(3)
his failure to co-operate with the FSA’s requests that he apply for the
cancellation of his Part IV permission; and

(4)
his continuing health problems since being admitted to hospital in July 2005.

2.3.
The FSA considers that Mr Stefanopoulos has not been open and co-operative in all of
his dealings with the FSA and has thereby failed to comply with Principle 11
(Relations with regulators) of the FSA’s Principles for Businesses (“the Principles”),
and to satisfy the FSA that he is ready, willing and organised to comply with the
requirements and standards of the regulatory system and his legal obligations.

2.4.
These failures, which are significant in the context of Mr Stefanopoulos’ suitability,
lead the FSA to conclude that Mr Stefanopoulos is not conducting his business
soundly and prudently and in compliance with proper standards. They also lead the
FSA to conclude that Mr Stefanopoulos is not a fit and proper person, and therefore
that he is failing, and is likely to fail, to satisfy the Threshold Conditions in relation to
the regulated activities for which he has Part IV permission.

Relevant statutory provisions

2.5.
The FSA's regulatory objectives established in section 2(2) of the Act include market
confidence, the reduction of financial crime and the protection of consumers.

2.6.
The FSA is authorised by section 45 of the Act to cancel an authorised person’s
Part IV permission, where it appears to the FSA that it is failing, or is likely to fail, to
satisfy the Threshold Conditions.

2.7.
Paragraph 5 of Schedule 6 to the Act sets out Threshold Condition 5 which provides
that:

“The person concerned must satisfy the Authority that he is a fit and proper person
having regard to all the circumstances, including –

(c)
the need to ensure that his affairs are conducted soundly and prudently.”

2.8.
Paragraph 17(1 (a) of Schedule 1 to the Act states:

“The Authority may make rules providing for the payment to it of such fees, in
connection with the discharge of any of its functions under or as a result of this
Act, as it considers will (taking account of its expected income from fees and
charges provided for by any other provisions of this Act) enable it to meet
expenses incurred in carrying out its functions or for any incidental purpose.”

2.9.
Paragraph 17(4) of Schedule 1 to the Act states:

3

“Any fee which is owed to the Authority under any provision made by or under
this Act may be recovered as a debt due to the Authority.”

Relevant Handbook provisions

2.10. In exercising its power to cancel a Part IV permission, the FSA must have regard to
guidance published in the FSA's Handbook of Rules and Guidance (“the Handbook”).
The relevant main considerations in relation to the action specified above are set out
below.

2.11. Principle 11 requires a firm to deal with its regulator in an open and co-operative way,
and to disclose to the FSA appropriately anything relating to the firm of which the
FSA would reasonably expect notice.

Relevant Rules and Guidance

2.12. The rules and guidance relating to the payment of fees and levies are located in the
Fees Manual (“FEES”). The rules relating to the imposition of administrative fees for
late submission of regulatory returns are located in the Supervision Manual (“SUP”).
Both manuals are part of the Handbook. From 1 January 2006, the principal rules
regarding the payment of fees/levies were amended and relocated from SUP and to
form part of the Fees Manual (“FEES”) in the Handbook. Both the previous and
current rules in FEES and SUP are relevant in this case. Previous rules relating to the
Financial Services Compensation Scheme levy, which were located in the
Compensation Sourcebook (“COMP”), which is also part of the Handbook, are also
relevant.

Rules effective until 31 December 2005

2.13. SUP 20.2.1R required that:

“A firm must pay to the FSA an amount equal to:

(1)
each periodic fee applicable to it; less

(2)
any deductions from the periodic fee specified in part 2 of SUP 20 Annex
2.”

2.14. SUP 20.2.7R(1) required that:

“The firm must pay the total amount due under SUP 20.2.1 R, using one of the
payment methods specified in SUP 20.2.7A R.”

2.15. COMP 13.8.1R required that:

“A participant firm must pay its share of any levy made by the FSCS:

(1)
in one payment; or

(2)
where the FSCS agrees, quarterly, at the beginning of each quarter, by
direct debit agreement.”

2.16. COMP 13.8.3R required that:

“A participant firm's share of a levy to which COMP 13.8.1 R(1) applies is due
on, and payable within 30 days of, the date when the invoice is issued.”

Rules and Guidance effective since 1 January 2006

2.17. FEES 2.2.1R states that:

“If a person does not pay the total amount of a periodic fee (including fees
relating to transaction reports to the FSA using the FSA's Transaction Reporting
System (see SUP 17)), FOS levy or case fee, or share of the FSCS levy or CFEB
levy, before the end of the date on which it is due, under the relevant provision in
FEES 4, 5, 6 or 7, that person must pay an additional amount as follows:

5

(1)
if the fee was not paid in full before the end of the due date, an
administrative fee of £250; plus

(2)
interest on any unpaid part of the fee at the rate of 5% per annum above
the Bank of England's repo rate from time to time in force, accruing on a
daily basis from the date on which the amount concerned became due.”

2.18. FEES 2.2.3G, which was amended in May 2009, and again in February 2011,
currently provides that:

“Paragraph 17(4) and paragraph 19B of Schedule 1 to and section 99(5) of the Act
permit the FSA to recover fees (including fees relating to payment services, the
issuance of electronic money, and, where relevant, FOS levies and CFEB levies),
and section 213(6) permits the FSCS to recover shares of the FSCS levy payable,
as a debt owed to the FSA and FSCS respectively, and the FSA and FSCS, as
relevant, will consider taking action for recovery (including interest) through the
civil courts. Also, the FOS Ltd (in respect of case fees) may take steps to recover
any money owed to it (including interest).”

2.19. FEES 4.2.1R requires that:

“A person shown in column (1) of the table in FEES 4.2.11 R as the relevant fee
payer must pay each periodic fee applicable to it, calculated in accordance with
the provisions referred to in column (2) of that table, as adjusted by any relevant
provision in this chapter:

(1)
in full and without deduction (unless permitted or required by a provision
in FEES); and

(2)
on or before the date given in column (3) of that table, unless FEES 4.2.10
R applies.”

2.20. Between 1 January 2006 and 31 October 2009, FEES 4.3.1R stated that:

“The periodic fee payable by a firm (except an ICVC or UCITS qualifier) is:

(1)
each periodic fee applicable to it calculated in accordance with FEES 4.3.3
R, using information obtained in accordance with FEES 4.4; less

(2)
any deductions from the periodic fees specified in Part 2 of FEES 4 Annex
2 R.”

2.21. FEES 4.3.1R was amended on 1 November 2009, and it currently states that:

“The periodic fee payable by a firm (except an ICVC or UCITS qualifier) is:

(1)
each periodic fee applicable to it calculated in accordance with FEES 4.3.3
R, using information obtained in accordance with FEES 4.4; plus

(1A)
any periodic fee applicable to it calculated in accordance with FEES
4.3.3A R using information relating to its
business obtained in
UK

accordance with FEES 4.4 (or by other means in the case of the Bank of
England); less

(2)
any deductions from the periodic fee specified in Part 2 of FEES 4 Annex
2 R or Parts 6 and/or 7 of FEES 4 Annex 11 R. For the purposes of this
deduction, any deduction available in Part 2 of FEES 4 Annex 2 R shall

6

not be applied to any fee calculated in accordance with FEES 4.3.3A R
and any deduction available in Part 6 and/or 7 of FEES 4 Annex 11 R shall
not be applied to any fees calculated in accordance with FEES 4.3.3 R.”

2.22. FEES 5.7.1R states that:

“A firm must pay annually to the FSA the general levy on or before the later of 1
April and 30 calendar days after the date when the invoice is issued by the FSA.”

2.23. FEES 6.7.1R requires that:

“A participant firm must pay its share of any levy made by the FSCS:

(1)
in one payment; or

(2)
where the FSCS agrees, quarterly, at the beginning of each quarter, by
direct debit agreement.”

2.24. FEES 6.7.3R states that:

“A participant firm's share of a levy to which FEES 6.7.1 R (1) applies is due on,
and payable within 30 days of, the date when the invoice is issued.”

2.25. FEES 7.2.1R requires that:

“A firm must pay each CFEB levy applicable to it:

(1)
in full and without deduction (unless permitted or required by a provision
in FEES); and

(2)
in accordance with the provisions of FEES 4.3.6 R.”

2.26. SUP 16.3.14R(1) states that:

“If a firm does not submit a complete report by the date on which it is due in
accordance with the rules in, or referred to in, this chapter or the provisions of
relevant legislation and any prescribed submission procedures, the firm must
pay an administrative fee of £250.”

Guidance concerning the relevant Threshold Condition

2.27. Guidance on the Threshold Conditions is set out in the part of the Handbook entitled
Threshold Conditions (“COND”).

COND 2.5 – Threshold Condition 5: Suitability (paragraph 5, Schedule 6 to the Act)

2.28. COND 2.5.1UK reproduces the relevant statutory provision that the person concerned
must satisfy the FSA that he is a fit and proper person having regard to all the
circumstances, including, among other things, the need to ensure that his affairs are
conducted soundly and prudently.

2.29. COND 2.5.4G (1) and (2) state that the FSA, when forming its opinion as to whether a
firm is conducting its affairs soundly and prudently, will have regard to relevant
matters, including whether it conducts its business with integrity and in compliance
with proper standards, and whether it can demonstrate that it conducts its affairs with
the exercise of due skill, care and diligence.

2.30. COND 2.5.4G(3) states that the FSA will only take into account relevant matters
which are significant in the context of the suitability of the firm.

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2.31. COND 2.5.6G states that the FSA, when forming its opinion as to whether a firm is
conducting its business with integrity and in compliance with proper standards, will
have regard to relevant matters, including whether:

 the firm has been open and co-operative in all its dealings with the FSA and is
ready and willing to comply with the requirements and standards under the
regulatory system (COND 2.5.6G(1));

 the firm has contravened, among other things, the requirements of the regulatory
system, which include the Threshold Conditions, the Principles and other rules
(COND 2.5.6G(4)).

Other relevant regulatory provisions

2.32. The FSA's policy on exercising its main enforcement powers is currently set out in the
Enforcement Guide (“EG”) certain provisions of which are summarised below. As
some of the conduct described in the Warning Notice took place prior to 28 August
2007, the FSA has also had regard to the relevant sections of EG.

2.33. EG 8.1(1) provides that the FSA may use its own initiative power to vary or cancel
the permission of an authorised firm under section 45 of the Act, where a firm is
failing or is likely to fail to satisfy the Threshold Conditions.

Cancelling a firm’s Part IV permission on the FSA’s own initiative

2.34. EG 8.13(1) states that the FSA will consider cancelling a Part IV permission using its
own initiative power contained in section 45 of the Act in circumstances where the
FSA has very serious concerns about a firm, or the way its business is or has been
conducted.

2.35. EG 8.14 provides examples of the circumstances in which the FSA will consider
cancelling a Part IV permission. EG 8.14(5) specifies that non-payment of FSA fees is
one such circumstance, and EG 8.14(7) specifies that repeated failure to comply with
rules or requirements is another such circumstance.

Facts and matters relied on

2.36. Mr Stefanopoulos became authorised on 31 October 2004 to carry on insurance
mediation and regulated home finance business.

2.37. Mr Stefanopoulos has repeatedly failed to pay promptly fees owed to the FSA since
August 2005, and as a result Mr Stefanopoulos has been referred to Enforcement in
December 2005, April 2007, November 2008 and February 2011. Following the three
previous referrals to Enforcement, regulatory enforcement action was taken but was
discontinued as Mr Stefanopoulos made belated payment of the outstanding fees. On
all four occasions, Mr Stefanopoulos only took steps to comply when forced with the
threat of imminent cancellation action. On this occasion, Mr Stefanopoulos paid the
outstanding fees and levies the day before he was due to give his oral representations
to the FSA.

2.38. Mr Stefanopoulos has also failed to comply with the Agreement which he entered into
with the FSA on 17 February 2009. Under the terms of the Agreement Mr
Stefanopoulos agreed to pay his next two sets of regulatory fees and levies by the date
stated on the FSA invoice, failing which Mr Stefanopoulos would, upon the FSA’s
request, apply for the cancellation of his Part IV permission. Mr Stefanopoulos has
failed to pay both his 2009/2010 and 2010/11 periodic fees and levies by the due

dates. Mr Stefanopoulos has subsequently failed to apply for the cancellation of his
Part IV permission despite previously undertaking to do so under the terms of the
Agreement and being requested by the FSA to do so.

2.39. Mr Stefanopoulos was admitted to hospital in July 2005, was readmitted and returned
home in January 2006, he was in hospital in April 2007 (when he suffered a major
heart attack) and October 2008, he had a number of health problems in December
2008.

2.40. In March 2011, Mr Stefanopoulos said that he had not traded for a year and that his
business had suffered disastrously.

Representations

2.41. In his letter of 4 May 2011, Mr Stefanopoulos said the FSA was intent on terminating
his authorisation and that is had no flexibility for dealing with scenarios such as his.
He said that the attitude of the FSA in concentrating solely on unpaid fees was
ethically unacceptable. He did not dispute that at times he was late in paying his fees
but he had always paid them. He accepted that at the time of his letter there was a fee
outstanding but he took exception to being labelled not ‘fit and proper’ to undertake
regulated activities. Nothing had been found wrong with the way that he conducted
his regulated activities in the visits in the last two years.

2.42. In his oral representations on 23 August 2011, supplemented by a number of
documents, Mr Stefanopoulos emphasised his vast experience of handling mortgages
cases. He also said that in the course of the FSA’s last two visits he had been found to
be doing nothing seriously wrong. He said that he felt hurt by the suggestion that he
was not fit to be authorised solely on the basis of late payment of fees, for which he
had a very good reason.

2.43. Mr Stefanopoulos explained that he was a sole trader, and that the deterioration in his
health in 2005 had therefore had a severe impact on his business, which had
previously been very successful. He said that on one occasion he was admitted to
hospital for eight weeks. His business had suffered further as a result of the recession
in 2008 and 2009, and the combination of these factors had made it difficult for him to
keep his business afloat. His profits had fallen year on year since 2004, and he had
suffered losses of £1,422 and £4,152 in 2009 and 2010 respectively. This explained
his late payment of fees.

2.44. He said that both his health and his business were now on the road to recovery, so he
would be able to pay his fees in future.

2.45. In relation to his health, Mr Stefanopoulos presented a recent letter from a cardiologist
and drew their attention to the statements that his symptoms were better than before
and that he appeared well on physical examination. He said that his remaining
symptoms would not prevent him from working at a desk.

2.46. Mr Stefanopoulos said that although his business’s income in 2011 to date was around
£7,000, he believed that it would perform better this year than in 2010, when its total
income was £16,644.

2.47. Mr Stefanopoulos provided accounts for the year ending on 30 December 2010 which
indicated that his business had had £6,309 in assets. He said he believed this to be
sufficient to meet the threshold conditions, taking into account the fact that 2010 was
the worst year so far for his business. He said he was unsure why the FSA’s fees did

not appear to be mentioned in the accounts and he said he would speak to his
accountant. He explained that the disparities between the figures in his accounts and
the RMARs were because he had only included paid, rather than payable, sums on the
RMARs, and had not stated his income from unregulated activities as he did not think
he was required to.

2.48. He felt that he had engaged openly with the FSA about his difficulties in paying fees.
When contacted about his failure to comply with the terms of the settlement
agreement, he explained why he was unable to do so. He was also preoccupied with
his health problems at the time, and with the prospect of undergoing a heart bypass
operation.

2.49. He explained that he was not ready to retire, and he asked the Panel to give him the
chance to continue doing the job he loved for another three years. He stated that he
had now paid all outstanding fees. He said that he had been told by his bank that he
could take a loan large enough to pay the FSA’s fees for that period. He also said that
someone had offered to guarantee payment of the fees. While these options had been
open to him in the past, he was only resorting to them now because he did not want to
lose his authorisation.

2.50. Following the meeting, Mr Stefanopoulos indicated that his accountant would charge
for an explanation for the lack of reference in his accounts to the FSA fees; he (Mr
Stefanopoulos) would be in a position within the next 28 days to pay the next year’s
fees in full; the problems in the past were all due to unforeseen serious health
problems; and he offered to pay three years fees in a lump sum. Another person wrote
to the FSA with an offer to pay his fees by direct debit from their account.

Findings and conclusions

2.51. The question for the FSA is whether it is satisfied that Mr Stefanopoulos is failing, or
is likely to fail, to satisfy the threshold conditions and in particular the conditions
relating to adequate resources and suitability. In considering his resources, the FSA
may have regard to the provision he makes for liabilities and the means by which he
manages the incidence of risk in connection with his business (paragraph 4 of the
Schedule 6 to the Act). In considering suitability, the FSA may have regard to the
need to ensure that his affairs are conducted soundly and prudently (paragraph 5).

2.52. In relation to the representations, the FSA noted that –

(1)
no provision had been made for liabilities in the accounts for the year ended 30
December (as on the face of the accounts) 2010;

(2)
those accounts, and the profit and loss chart prepared separately, gave concern
for the future ability to meet liabilities rather than comfort;

(3)
there was no evidence of cover in the event of further ill-health;

(4)
the medical evidence indicated an improvement in health, not a clean bill of
health;

(5)
there was no expression of regret for the past history of late payment including
the breach of the Settlement Agreement;

(6)
there was no recognition that supervisory visits from the FSA had given rise to
concerns which went beyond the non-payment or the late payment of fees; and

(7)
the proposal to meet fees in the future depended on the goodwill of a third
person, unknown to the FSA, rather than the resources of Mr Stefanopoulos,
the authorised firm.

2.53. Whilst the FSA acknowledges that Mr Stefanopoulos loves his job and wishes to
continue doing it, and it acknowledges that he has suffered serious ill-health over a
number of years, on the evidence before it, the FSA has no power to permit his
permission to continue having regard to the conditions laid down in the Act.

2.54. In the light of the history of compliance, and the current circumstances as disclosed in
the representations, the clear conclusion is that the permission must be cancelled for
the reasons given earlier in this notice.

3.
DECISION MAKER

3.1.
The decision which gave rise to the obligation to give this Decision Notice was made
by the Regulatory Decisions Committee.

4.
IMPORTANT

4.1.
This Decision Notice is given to Mr Stefanopoulos, under section 54 and in
accordance with section 388 of the Act and it is being served on him at the address he
notified to the FSA as his principal place of business. The following statutory rights
are important.

The Tribunal

4.2.
You have the right to refer the matter to which this Decision Notice relates to the
Upper Tribunal (the “Tribunal”). The Tax and Chancery Chamber is the part of the
Upper Tribunal, which, among other things, hears references arising from decisions of
the FSA. Under paragraph 2(2) of Schedule 3 of the Tribunal Procedure (Upper
Tribunal) Rules 2008, you have 28 days from the date on which this Decision Notice
is given to you to refer the matter to the Tribunal.

4.3.
A reference to the Tribunal is made by way of a reference notice (Form FTC3) signed
by you (or on your behalf) and filed with a copy of this Notice. The Tribunal’s
contact details are The Upper Tribunal, Tax and Chancery Chamber, 45 Bedford
Square,
London
WC1B
3DN
(tel:
020
7612
9700;
email:

financeandtaxappeals@tribunals.gsi.gov.uk).

4.4.
Further details are contained in “Making a Reference to the UPPER TRIBUNAL (Tax
and Chancery Chamber)” which is available from the Upper Tribunal website:

4.5.
A copy of Form FTC3 must also be sent to Alex Banerjea at the FSA, 25 The North
Colonnade, Canary Wharf, London E14 5HS at the same time as filing a reference
with the Tribunal.

Access to evidence

4.6.
Section 394 of the Act applies to this Decision Notice. In accordance with section
394(1), Mr Stefanopoulos is entitled to have access to:

(a)
the material upon which the FSA has relied in deciding to give Mr
Stefanopoulos this Notice - a schedule of such material is given with this
Notice;

(b)
any secondary material which, in the opinion of the FSA, might undermine
that decision. There is no such secondary material.

Confidentiality and publicity

4.7.
You should note that this Decision Notice may contain confidential information and
should not be disclosed to a third party (except for the purpose of obtaining advice on
its contents). The effect of section 391 of the Act is that neither you nor a person to
whom this notice is copied may publish it or any details concerning it unless the FSA
has published the notice or those details. The FSA must publish such information
about the matter to which a Decision Notice or Final Notice relates as it considers
appropriate. You should be aware, therefore, that the facts and matters contained in
this notice may be made public.

FSA contacts

4.8
If Mr Stefanopoulos has any questions regarding the procedures of the Regulatory
Decisions Committee, he should contact Adam Taylor (direct line: 020 7066 2546).

4.9
For more information concerning this matter generally, please contact Simone
Bebbington at the FSA (direct line: 020 7066 0666/fax: 020 7066 0667).



Tim Herrington
Chairman, Regulatory Decisions Committee