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FINAL NOTICE

Individual
Reference
Number:

DFC01043

ACTION

1.
For the reasons set out in this Final Notice, the Authority hereby takes the following
action against Mr Clarke.

2.
The Authority gave Mr Clarke the Decision Notice, which notified Mr Clarke that, for
the reasons given below and pursuant to section 56 of the Act, the Authority had
decided to make an order prohibiting him from performing any function in relation to
any regulated activity carried on by any authorised person, exempt person or exempt
professional firm.

3.
Mr Clarke has not referred the matter to the Tribunal within 28 days of the date on
which the Decision Notice was given to him.

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4.
Accordingly, for the reasons set out below, the Authority hereby makes an order
pursuant to section 56 of the Act prohibiting Mr Clarke from performing any function
in relation to any regulated activity carried on by any authorised person, exempt
person or exempt professional firm. The Prohibition Order takes effect from 1 June
2017.

DEFINITIONS

5.
The definitions below are used in this Final Notice (and in the Annexes):


“the Act” means the Financial Services and Markets Act 2000;

“the Authority” means the Financial Conduct Authority;

“the Decision Notice” means the Decision Notice given to Mr Clarke dated 26 April
2017;


“EG” means the Authority’s Enforcement Guide;

“FIT” means the Fit and Proper Test for Approved Persons and specified significant-
harm functions sourcebook;

“the Handbook” means the Authority’s Handbook of rules and guidance;

“the Prohibition Order” means the order prohibiting Mr Clarke, pursuant to section 56
of the Act, from performing any function in relation to any regulated activity carried on
by any authorised person, exempt person or exempt professional firm;

“Schroder” means Schroder Investment Management Limited;

“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber); and

“the Warning Notice” means the Warning Notice given to Mr Clarke dated 4 April 2017.

RELEVANT STATUTORY PROVISIONS

6.
The statutory and regulatory provisions relevant to this Final Notice are set out in
Annex A.

SUMMARY OF REASONS

7.
The Authority has concluded, on the basis of the facts and matters and conclusions
described in the Warning Notice, and in the Decision Notice, that Mr Clarke is not a fit
and proper person to perform any function in relation to any regulated activity carried
on by any authorised person, exempt person or exempt professional firm, as his
conduct demonstrates a clear and serious lack of honesty, integrity and reputation.
Specifically, Mr Clarke:

(a) was convicted, upon his own confession, on 15 March 2016, of nine offences of

insider dealing to dispose of price affected securities on a regulated market
contrary to section 52(1) of the Criminal Justice Act 1993; and

(b) was sentenced on 13 June 2016 to two years’ imprisonment.

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FACTS AND MATTERS RELIED ON

8.
Mr Clarke was previously approved by the Authority to perform the following
controlled functions:


(between 17 March 2003 and 12 December 2003) CF26 (Customer Trading) in
relation to Beaumont Capital LLP;


(between 24 December 2003 and 31 October 2007) CF26 (Customer Trading) in
relation to Schroder; and


(between 1 November 2007 and 22 January 2013) CF30 (Customer) in relation to
Schroder.

9.
Mr Clarke is not currently approved to perform any controlled functions in relation to
any firm authorised by the Authority, and he has not been approved to perform any
controlled function since 22 January 2013.


10.
On 15 March 2016, Mr Clarke was convicted at Southwark Crown Court of nine
offences of insider dealing to dispose of price affected securities on a regulated
market.

11.
On 13 June 2016, Mr Clarke was sentenced at Southwark Crown Court to two years’
imprisonment for those offences.


12.
Further, the offences were committed when Mr Clarke was approved by the Authority
to perform controlled functions as summarised in Annex B.


13.
In her sentencing remarks on 13 June 2016, Judge Kroner set out the aggravating
factors in Mr Clarke’s case, which included: the lengthy period of time over which Mr
Clarke committed the offences; his deliberate and dishonest misuse of the position of
trust in which he was placed throughout the period for which he worked for Schroder;
the damage caused to Schroder’s institutional reputation by his activities; and Mr
Clarke’s use of accounts opened in the name of his family members.


DECISION MAKER

13.
The decision which gave rise to the obligation to give this Final Notice was made by
the Regulatory Decisions Committee.

IMPORTANT

14.
This Final Notice is given to Mr Clarke in accordance with section 390(1) of the Act.


15.
The Authority must publish such information about the matter to which this Final
Notice relates as the Authority considers appropriate. The information may be
published in such manner as the Authority considers appropriate. However, the
Authority may not publish information if such publication would, in the opinion of the
Authority, be unfair to Mr Clarke or prejudicial to the interest of consumers.


16.
The Authority intends to publish this Final Notice and such information about the
matter to which this Final Notice relates as it considers appropriate.


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Authority contact

17.
For more information concerning this matter generally, please contact Dilip Vekariya
at the Authority (direct line: 020 7066 5520).

John Kirby
Enforcement and Market Oversight Division


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ANNEX A

RELEVANT STATUTORY PROVISIONS

1.
The Authority’s operational objectives include securing an appropriate degree of
protection for consumers (section 1C of the Act) and protecting and enhancing the
integrity of the UK financial system (section 1D of the Act).

2.
Section 56(1) of the Act provides:

“The [Authority] may make a prohibition order if it appears to it that an individual is
not a fit and proper person to perform functions in relation to a regulated activity
carried on by -

(a)
an authorised person,

(b)
a person who is an exempt person in relation to that activity, or

(c)
a person to whom, as a result of Part 20, the general prohibition does not

apply in relation to that activity.”

RELEVANT REGULATORY PROVISIONS

3.
In exercising its power to make a prohibition order, the Authority must have regard to
guidance published in the Handbook and in regulatory guides, such as EG. The
relevant main considerations in relation to the action specified above are set out
below.

The Enforcement Guide

4.
The Authority’s policy in relation to exercising its power to issue a prohibition order is
set out in EG.

5.
EG 9.1 explains the purpose of prohibition orders in relation to the Authority’s
statutory objectives.

6.
EG 9.2 sets out the Authority’s general policy on making prohibition orders. In
particular:

(a)
EG 9.2.1 states that the Authority will consider all relevant circumstances,
including whether enforcement action has been taken against the individual by
other enforcement agencies, in deciding whether to make a prohibition order;

(b)
EG 9.2.2 states that the Authority has the power to make a range of prohibition
orders depending on the circumstances of each case; and

(c)
EG 9.2.3 states that the scope of a prohibition order will depend on, amongst
other things, the reasons why the individual is not fit and proper and the
severity of risk he poses to consumers or the market generally.

7.
EG 9.5.1 states that where the Authority is considering whether to make a prohibition
order against someone who is not an approved person, the Authority will consider the
severity of the risk posed by the individual and may prohibit him where it considers
that it is appropriate to achieve one or more of the Authority’s statutory objectives.

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8.
EG 9.5.2 provides that, when considering whether to exercise its power to make a
prohibition order against someone who is not an approved person, the Authority will
consider all the relevant circumstances of the case. These may include, but are not
limited to, the factors set out in EG 9.3.2. Those factors include: whether the
individual is fit and proper to perform functions in relation to regulated activities
(noting the criteria set out in FIT 2.1, 2.2, and 2.3); the relevance and materiality of
any matters indicating unfitness; the length of time since the occurrence of any
matters indicating unfitness; and the severity of the risk which the individual poses to
consumers and to confidence in the financial system.

Fit and Proper Test for Approved Persons

9.
The Authority has issued guidance on the fitness and propriety of individuals in FIT.

10.
FIT 1.3.1BG(1) states that the most important considerations when assessing the
fitness and propriety of a person to perform a controlled function include that person’s
honesty, integrity and reputation.

11.
FIT 2.1.1G states that in determining a person’s honesty, integrity and reputation, the
Authority will have regard to all relevant matters including, but not limited to, those
set out in FIT 2.1.3G. It notes, amongst other things and by way of example, that:

“… conviction for a criminal offence will not automatically mean an application will be
rejected. The [Authority] treats each candidate’s application on a case-by-case basis,
taking into account the seriousness of, and the circumstances surrounding, the
offence, the explanation offered by the convicted person, the relevance of the offence
to the proposed role, the passage of time since the offence was committed and
evidence of the individual’s rehabilitation.”

12.
FIT 2.1.3G(1) states that the matters referred to in FIT 2.1.1G include, but are not
limited to, whether a person has been convicted of any criminal offence, noting that
particular consideration will be given to certain offences including those of dishonesty,
fraud and financial crime (amongst other things).

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ANNEX B

MR CLARKE – SUMMARY OF DATES OF APPROVAL FOR CONTROLLED FUNCTIONS AND DATES OF HIS CRIMINAL OFFENCES

Controlled Functions: 2003-2004
2005-2006
2007-2008
2009-2010
2011-2012
2013

CF26 (Customer
Trading) for Beaumont
Capital LLP

CF26 (Customer
Trading) for Schroder

CF30 (Customer) for
Schroder

Count 2

06/01/2005 -
07/03/2005

Count 4

06/06/2006





Count 5

28/09/2006
and
29/09/2006

Count 6



13/02/2009 -
17/02/2009

Count 7



24/05/2010 -
26/05/2010