FINAL NOTICE

Individual ref:
JDL00011

1.
ACTION

1.1. For the reasons given in this Notice, the Authority hereby:

a) imposes on Mr Leslie a financial penalty of £28,000;

b) withdraws the approval granted to Mr Leslie to perform CF4 (Partner), CF10

(Compliance Oversight) and CF11 (Money Laundering Reporting) at Leslie & Nuding;

and

c) makes an order prohibiting Mr Leslie from performing any significant influence

function in relation to any regulated activity carried on by any authorised person,

exempt person or exempt professional firm.

1.2. Mr Leslie agreed to settle at an early stage of the Authority’s investigation. He therefore

qualified for a 30% stage 1 discount under the Authority’s executive settlement

procedures. Were it not for this discount, the Authority would have imposed a financial

penalty of £40,000 on Mr Leslie.

2. SUMMARY OF REASONS

2.1. The Authority sanctions Mr Leslie for breaches of Statement of Principle 6 in performing

the significant influence controlled functions CF4 (Partner) and CF10 (Compliance

Oversight) during the relevant period. Mr Leslie also held CF11 (Money Laundering

Reporting) during the relevant period.

2.2. Mr Leslie breached Statement of Principle 6 by failing to discharge adequately his

responsibility to control the distribution of prospectuses for three UCISs to retail

investors and thereby failing to exercise due skill, care and diligence in managing the

business of Leslie & Nuding.

2.3. As a direct result of his incompetent approach to his responsibilities, prospectuses were

issued to approximately 2,900 retail investors without an adequate assessment of their

eligibility for UCIS promotions having been made. In total, approximately 880 investors

invested €38 million in the three UCISs on a non-advised basis. The UCISs fell into

financial difficulties from 2006 and the investors’ original investments may now be

virtually worthless.

2.4. Mr Leslie has failed to meet minimum regulatory standards in terms of performing

significant influence functions with due skill, care and diligence. He is not fit and proper

to perform significant influence functions at any authorised person, exempt person or

exempt professional firm. Accordingly, the Authority has decided to impose the

Prohibition Order on him.

2.5. This action supports the Authority’s regulatory objectives of protecting consumers and

enhancing the integrity of the financial system.

3. DEFINITIONS

3.1. The definitions below are used in this Final Notice.

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

b) “AdminCo” means the non-Authority authorised management services company

which facilitated sales of the three UCISs;

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c) “APER” or the “Statements of Principle” means the Statements of Principle and

Code of Conduct for Approved Persons set out in the Authority and Authority’s

Handbook;

d) “Authority” means the body corporate previously known as the Financial Services

Authority and renamed on 1 April 2013 as the Financial Conduct Authority;

e) “Authority’s Handbook” means the Authority’s Handbook of Rules and Guidance;

f) “Burlington” means Burlington Associates Limited;

g) “CF” means controlled function;

h) “EG” means the Authority’s Enforcement Guide;

i) “ENF” means the Authority’s Enforcement Manual, which was in force between 1

December 2004 and 27 August 2007;

j) “FIT” means the Authority’s Fit and Proper Test for Approved Persons;

k) “IFA” means independent financial adviser;

l) “Leslie & Nuding” means the small IFA firm based in London which is now named

Leslie & Swallow;

m) “Mr Leslie” means John Douglas Leslie;

n) “Prohibition Order” means the order to be made pursuant to section 56 of the Act

prohibiting Mr Leslie from performing any significant influence function in relation

to any regulated activity carried on by any authorised person, exempt person or

exempt professional firm;

o) “relevant period” means the period between 1 April 2005 and 31 December 2005;

p) “Settlement Decision Makers” means two members of the Authority’s senior

management who have jointly taken the decision which gave rise to the

obligation to give this Notice;

q) “UCIS” means unregulated collective investment scheme;

r) “three UCISs” means the three unregulated collective investment schemes

promoted by Leslie & Nuding which invested in property developments in Croatia,

Bulgaria and Montenegro; and

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

4. FACTS AND MATTERS

4.1. Mr Leslie was a partner in Leslie & Nuding (now named Leslie & Swallow), a small IFA

based in London. During the relevant period, Mr Leslie was approved to perform CF4

(Partner), CF8 (Apportionment and Oversight), CF10 (Compliance Oversight), CF11

(Money Laundering Reporting) and CF21 (Investment Adviser) at Leslie & Nuding.

4.2. In around April 2005, Mr Leslie was approached by Burlington for advice on the statutory

restrictions around the promotion of UCISs to retail investors. Burlington was planning

to play a role in selling three UCISs to UK investors. The objective of the three UCISs

was to raise money to invest in land and property developments in Croatia, Bulgaria and

Montenegro. Burlington approached Mr Leslie for advice because Leslie & Nuding had

previous experience of overseeing sales of UCISs by an appointed representative.

4.3. Through his previous experience, Mr Leslie was familiar with the statutory restrictions

around how UCISs could be promoted to the general public. He advised Burlington

about the difference between the general advertising of an investment opportunity and

the act of specifically promoting investments in the three UCISs.

4.4. Mr Leslie agreed with Burlington that Leslie & Nuding would take responsibility for

sending prospectuses to prospective investors who had signed an eligibility certificate,

and for providing advice to investors who did not certify themselves as eligible. After

MarketingCo, the property marketing company which sent out email advertisements and

held sales seminars (assisted by Burlington) in relation to the three UCISs, had

generated interest in the schemes, Leslie & Nuding would:

a) review the certificates sent by interested investors confirming themselves as eligible

to receive UCIS promotions, either as a self-certified sophisticated investor or a

certified high net worth investor; and

b) issue promotional prospectuses only to those investors who had been certified as

eligible.

4.5. Mr Leslie delegated the administrative aspect of these duties to AdminCo, a non-

Authority authorised firm with links to Burlington which operated from the same office

building as Burlington, but he retained the responsibility for checking that prospectuses

were only sent to customers who had provided eligibility certificates. During the relevant

period, AdminCo received thousands of prospectus request forms, collated eligibility

certificates and issued prospectuses in the name of Leslie & Nuding.

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4.6. Leslie & Nuding received approximately £65,000 in commission for its role in promoting

investments in the three UCISs. AdminCo covered all of the administrative and staff

costs associated with issuing the prospectuses.

4.7. Mr Leslie was the only person at Leslie & Nuding involved in this line of business. In his

role as a significant influence function holder, he was personally responsible for ensuring

that prospectuses were only sent to eligible investors.

Inadequate record keeping for investor certification

4.8. Mr Leslie gave Burlington and AdminCo access to Leslie & Nuding’s records management

system and requested that they upload eligibility certificates and other documents so

that he could control the investor certification process from his office. In the event, the

firms failed to provide the records, meaning that Mr Leslie was not in a position to

oversee the distribution of prospectuses as planned. He periodically visited Burlington /

AdminCo’s offices to spot check a sample of eligibility certificates, but this was not a

sufficient step to ensure that he could adequately carry out his duties. Mr Leslie did not

obtain the records until 2011, when investors began to submit complaints to Leslie &

Nuding about its role in the UCIS sales.

Inadequate oversight of investor certification

4.9. Potential investors who attended the sales seminars were encouraged to request a

promotional prospectus to learn more about the schemes and ultimately apply to invest.

In order to receive a prospectus, potential investors were asked to sign certificates

confirming their eligibility for UCIS promotions, either as a sophisticated investor or a

high net worth investor.

4.10. It was Mr Leslie’s responsibility to ensure a controlled distribution of prospectuses to

eligible investors only. He should have verified that prospectuses were issued only to

investors who had certified themselves as eligible.

4.11. However, Mr Leslie failed to check that prospectuses were only sent to investors who had

submitted eligibility certificates. He made only very cursory spot checks on certificates

either before or after prospectuses had been issued. This created a significant risk that

investors could receive a promotional prospectus without anyone checking that they had

properly signed an eligibility certificate.

Provision of unclear information to investors

4.12. One of Mr Leslie’s motivations for involving Leslie & Nuding in the promotion of the three

UCISs was the potential to generate advised sales. He anticipated that any investor who

could not be certified as sophisticated or high net worth could be referred to Leslie &

Nuding. He would then assess the investor’s individual circumstances and needs, and

potentially recommend the UCISs to the investor on an advised basis.

4.13. Alongside the prospectus, Mr Leslie authorised AdminCo to issue the following

documents to potential investors on behalf of Leslie & Nuding:

a) an initial disclosure document (“IDD”);

b) terms of business;

c)
a key facts document about costs; and

d) a covering letter.

4.14. Even though Mr Leslie knew that the vast majority of investors would invest in the UCISs

on a non-advised basis, each of these accompanying documents contained misleading

references to an advised service. For example, the IDD stated that Leslie & Nuding

would “advise and make a recommendation for you after we have assessed your needs”.

The terms of business began: “We offer independent advice […]” with the customer

declaration stating “I am agreeable to you acting as my financial adviser […]”.

4.15. In the early stages of the three UCISs being promoted, Mr Leslie spotted the error in the

IDD and asked AdminCo to send out a revised version. However, he did not take any

steps to ensure the error was corrected and AdminCo continued to send out the incorrect

IDD to potential investors.

4.16. Mr Leslie negligently authorised the use of his firm’s sales documentation, creating a risk

that potential investors were unclear or misled as to the service they were receiving and

the regulatory protections which might be available to them (ultimately no advised sales

flowed to Mr Leslie from this process).

Impact of inadequate oversight

4.17. Without Mr Leslie’s knowledge, the three UCISs were promoted by MarketingCo and

Burlington to an unrestricted audience of thousands of retail investors, by both

unsolicited email mailshots and in person at sales seminars and workshops, using urgent

timescales and highly attractive forecasts on returns. As a result there was a risk that

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investors who would not certify themselves as eligible would be keen to invest in the

three UCISs.

4.18. Mr Leslie’s passive approach to his duties allowed AdminCo to issue promotional

prospectuses to approximately 2,900 retail consumers with minimal oversight. Hundreds

of investors informed Burlington or AdminCo that they felt they could not be certified as

sophisticated or high net worth. Unbeknownst to Mr Leslie, the firms assessed these

investors as eligible to receive a prospectus, using a risk questionnaire which was

inadequate for that purpose.

4.19. In total, approximately 880 investors invested €38 million in the three UCISs on a non-

advised basis. The three UCISs fell into financial difficulties from 2006 and the investors’

original investments may now be virtually worthless.

5. FAILINGS

5.1. The relevant regulatory provisions are referred to in the Annex to this Notice.

5.2. Mr Leslie has breached Statement of Principle 6 by failing to act with due skill, care and

diligence in managing the business of Leslie & Nuding, on the basis of the specific failings

detailed below.

5.3. As a holder of a number of significant influence functions at Leslie & Nuding, Mr Leslie

was responsible for governing the activities of the firm, including by supervising and

monitoring adequately any agent to whom it had delegated business activities.

5.4. Mr Leslie agreed with Burlington and AdminCo that Leslie & Nuding would take on

responsibility for ensuring that prospectuses for the three UCISs were only sent to

investors who had completed eligibility certificates. He entered into a business

arrangement with Burlington and AdminCo, to whom he delegated the task of sending

out the prospectuses and related documents. Mr Leslie failed to discharge his

responsibility, only carrying out limited spot checks in a way that did not allow him to

ensure that prospectuses were only sent to eligible investors.

5.5. This allowed AdminCo to issue prospectuses to thousands of potential investors without

adequate supervision by Mr Leslie.

5.6. Mr Leslie also failed to adequately oversee AdminCo’s activities, with the result that

investors were sent potentially misleading information about the service that they were

receiving from Leslie & Nuding.

5.7. Through this careless approach to his responsibilities Mr Leslie failed to show due skill,

care and diligence in breach Statement of Principle 6.

Not fit and proper

5.8. Mr Leslie’s conduct demonstrated a lack of competence and capability such that he is not

fit and proper to perform any significant influence function in relation to regulated

activities carried on at any authorised person, exempt person or exempt professional

firm.

6. SANCTION

Financial penalty

6.1. The Authority hereby imposes a financial penalty on Mr Leslie for the breach of

6.2. The Authority's policy on the imposition of financial penalties for the misconduct in this

case is set out in Chapter 13 of ENF, which was in force between 1 December 2004 and

27 August 2007 and formed part of the Authority’s Handbook. The relevant sections of

ENF are set out in more detail in the Annex to this Notice.

6.3. The principal purpose of imposing a financial penalty is to promote high standards of

regulatory conduct by deterring persons who have committed breaches from committing

further breaches, helping to deter other persons from committing similar breaches and

demonstrating generally the benefits of compliant behaviour.

6.4. In determining whether a financial penalty is appropriate, the Authority is required to

consider all the relevant circumstances of a case. Applying the criteria set out in Chapter

13 of ENF, a financial penalty is an appropriate sanction in this case, given the serious

nature of the breach and the need to send out a strong message of deterrence to others.

6.5. ENF 13.3.3G sets out a non-exhaustive list of factors that may be relevant to

determining the appropriate level of financial penalty to be imposed on a person under

the Act. The following factors are relevant to this case.

The seriousness of the misconduct or contravention – ENF13.3.3G(1)

6.6. In determining the appropriate sanction, the Authority had regard to the seriousness of

the contravention in question, including the duration of the contravention, the number of

retail investors affected, the risks to which those investors were exposed and the

significant sums they have lost.

The extent to which the breach was deliberate or reckless – ENF13.3.3G(2)

6.7. Mr Leslie did not act deliberately or recklessly.

Whether the person on whom the penalty is to be imposed is an individual, and the

financial resources and other circumstances of the individual – ENF13.3.3G(3)

6.8. The Authority recognises that the financial penalty imposed on Mr Leslie is likely to have

a significant impact on him as an individual, but it is considered to be proportionate in

relation to the seriousness of the misconduct and to Mr Leslie’s position as an approved

person performing significant influence functions at Leslie & Nuding.

6.9. The financial penalty is appropriate, having taken account of all relevant factors,

including the impact such a penalty might have on Mr Leslie’s financial resources and the

need for credible deterrence.

Disciplinary record and compliance history – ENF13.3.3G(6)

6.10. There has been no previous disciplinary action against Mr Leslie.

Previous action taken by the Authority – ENF13.3.3G(7)

6.11. In determining the level of financial penalty, the Authority has taken into account

penalties imposed by the Authority on other approved persons for similar misconduct.

6.12. Having considered all the circumstances set out above, £40,000 is an appropriate

financial penalty to impose on Mr Leslie for the breach of Statement of Principle 6. After

applying the 30% discount for early settlement, the penalty to be paid is £28,000.

6.13. The Authority has had regard to the guidance in Chapter 9 of EG in deciding that Mr

Leslie be prohibited from performing any significant influence function. The relevant

provisions of EG are set out in the Annex of this Notice.

6.14. Given the nature and seriousness of the failures outlined above, Mr Leslie’s conduct

demonstrated a serious lack of competence such that he is not fit and proper to perform

any significant influence function in relation to regulated activities carried on at any

authorised person, exempt person or exempt professional firm. In the interests of

consumer protection, it is appropriate and proportionate in all the circumstances to

impose the Prohibition Order on Mr Leslie in the terms set out above.

7. CONCLUSION

7.1. Mr Leslie’s conduct at Leslie & Nuding fell short of the minimum regulatory standards

required of an approved person. He has breached Statement of Principle 6 and is not fit

and proper to hold any significant influence function. Having regard to all the

circumstances, it is appropriate and proportionate to impose a financial penalty of

£28,000 on Mr Leslie and to make the Prohibition Order against him.

8. PROCEDURAL MATTERS

Decision maker

8.1. The decision which gave rise to the obligation to give this Notice was made by the

Settlement Decision Makers.

8.2. This Final Notice is given under and in accordance with section 390 of the Act.

Manner of and time for payment

8.3. Mr Leslie must make a payment of £7,000 to the Authority within 14 days from the date

of this Final Notice, followed by a second payment of £21,000 within 12 months of the

date of this Final Notice.

If the financial penalty is not paid

8.4. If all or any of the financial penalty becomes overdue for payment, the Authority may

recover the outstanding amount as a debt owed by Mr Leslie and due to the Authority.

8.5. Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of information

about the matter to which this Notice relates. Under those provisions, the Authority

must publish such information about the matter to which this 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 Leslie or

prejudicial to the interests of consumers or detrimental to the stability of the UK financial

system.

8.6. The Authority will publish such information about the matter to which this Final Notice

relates as it considers appropriate.

Authority contact

8.7. For more information concerning this matter generally, contact Rachel West at the

Authority (direct line: 020 7066 0142 / fax: 020 7066 0143).

Head of Department – Enforcement and Financial Crime Division

for and on behalf of the Authority

ANNEX

STATUTORY PROVISIONS, REGULATORY GUIDANCE AND POLICY

Statutory provisions

1. Section 1A of the Act provides that the body corporate previously known as the Financial

Services Authority is renamed the Financial Conduct Authority.

2. The Financial Conduct Authority’s regulatory objectives are set out in section 1B to 1L of

the Act and include protecting and enhancing confidence in the financial system and

securing an appropriate degree of protection for consumers.

3. Section 56 of the Act provides that the Authority may make a prohibition order if it

appears to the Authority that an individual is not a fit and proper person to perform

functions in relation to a regulated activity carried on by an authorised person. Such an

order may relate to a specific regulated activity, an activity falling within a specified

description or all regulated activities.

4. Section 63 of the Act provides that the Authority may withdraw an individual’s approval

to carry out a controlled function if it considers that the person in respect of whom the

approval was given is not a fit and proper person to perform the function to which the

approval relates.

5. Section 66 of the Act provides that the Authority may take action to impose a penalty on

an individual of such amount as it considers appropriate where it appears to the

Authority that the individual is guilty of misconduct and it is satisfied that it is

appropriate in all the circumstances to take action. Misconduct includes failure, while an

approved person, to comply with a Statement of Principle issued under section 64 of the

Act or to have been knowingly concerned in a contravention by the relevant authorised

person of a requirement imposed on that authorised person by or under the Act.


6. Section 390 of the Act provides that a final notice about a penalty must state the amount

of the penalty and the matter and period in which the penalty is to be paid. A final

notice about an order must set out the terms of the order and the date from which the

order has effect.

Handbook provisions

7. In exercising its power to impose a financial penalty, the Authority must have regard to

relevant provisions in the Authority’s Handbook of rules and guidance (the “Authority’s

Handbook”). The main provisions relevant to the action specified above are set out

below.

Statements of Principle and the Code of Practice for Approved Persons

(“APER”)

8. APER sets out the Statements of Principle as they relate to approved persons and

descriptions of conduct which, in the opinion of the Authority, do not comply with a

Statement of Principle. APER further describes factors which, in the opinion of the

Authority, are to be taken into account in determining whether or not an approved

person’s conduct complies with a Statement of Principle.

9. APER 3.1.3G states that, when establishing compliance with or a breach of a Statement

of Principle, account will be taken of the context in which a course of conduct was

undertaken,
including
the
precise
circumstances
of
the
individual
case,
the

characteristics of the particular controlled function and the behaviour to be expected in

that function.

10. APER 3.1.4G provides that an approved person will only be in breach of a Statement of

Principle where he is personally culpable, that is in a situation where his conduct was

deliberate or where his standard of conduct was below that which would be reasonable in

all the circumstances.

11. APER 3.1.6G provides that APER (and in particular the specific examples of behaviour

which may be in breach of a generic description of conduct in the code) is not exhaustive

of the kind of conduct that may contravene the Statements of Principle.

12. The Statement of Principle relevant to this matter is Statement of Principle 6, which

provides that an approved person performing a significant influence function must

exercise due skill, care and diligence in managing the business of the firm for which he is

responsible in his controlled function.

Fit and Proper Test for Approved Persons (“FIT”)

13. The purpose of FIT is to outline the main criteria for assessing the fitness and propriety

of a candidate for a controlled function. FIT is also relevant in assessing the continuing

fitness and propriety of an approved person.

14. FIT 1.3.1G provides that the Authority will have regard to a number of factors when

assessing a person’s fitness and propriety. One of the considerations will be the person’s

competence and capability.

The Enforcement Manual (“ENF”) and Enforcement Guide (“EG”)

Prohibition orders

15. EG 9.1 states that the Authority’s power under section 56 of the Act to prohibit

individuals who are not fit and proper from carrying out controlled functions in relation to

regulated activities helps the Authority to work towards achieving its regulatory

objectives. The Authority may exercise this power to make a prohibition order where it

considers that, to achieve any of those objectives, it is appropriate either to prevent an

individual from performing any functions in relation to regulated activities, or to restrict

the functions which he may perform.

16. EG 9.3 states that in deciding whether to make a prohibition order the Authority will

consider all the relevant circumstances.

17. EG 9.4 sets out the general scope of the Authority’s power in this respect. The Authority

has the power to make a range of prohibition orders depending on the circumstances of

each case and the range of regulated activities to which the individual’s lack of fitness

and propriety is relevant.

18. EG 9.5 provides that the scope of the prohibition order will depend on the range of

functions which the individual concerned performs in relation to regulated activities, the

reasons why he is not fit and proper and the severity of risk which he poses to

consumers or the market generally.

19. EG 9.9 provides that when deciding whether to make a prohibition order against an

approved person, the Authority will consider all the relevant circumstances of the case.

These may include, but are not limited to, the following:

(a)
whether the individual is fit and proper to perform the functions in relation to

regulated activities. The criteria for assessing the fitness and propriety of

approved persons are set out in FIT 2.1 (honesty, integrity and reputation), FIT

2.2 (competence and capability) and FIT 2.3 (financial soundness) (EG 9.9(2));

(b)
whether, and to what extent, the approved person has:

(i)
failed to comply with the Statement of Principle issued by the Authority

with respect to the conduct of approved persons; or

(ii)
been knowingly concerned in a contravention by the relevant firm of a

requirement imposed on the firm by or under the Act (including the

Principles and other rules) (EG 9.9(3));

(c)
the relevance and materiality of any matters indicating unfitness (EG 9.9(5));

(d)
the length of time since the occurrence of any matters indicating unfitness (EG

9.9(6));

(e)
the particular controlled function the approved person is (or was) performing, the

nature and activities of the firm concerned and the markets in which he operates

(EG 9.9(7)); and

(f)
the severity of the risk which the individual poses to consumers and to confidence

in the financial system (EG 9.9(8)).

20. EG 9.12 provides a number of examples of types of behaviour which have previously

resulted in the Authority deciding to issue a prohibition order. The examples include a

serious lack of competence (EG 9.12(3)).

21. EG 9.23 provides that in appropriate cases the Authority may take other action against

an individual in addition to making a prohibition order, including the use of its power to

impose a financial penalty.

22. In summary, the relevant considerations are whether, in terms of honesty, integrity,

competence and capability, the relevant individual is fit and proper to perform functions

in relation to regulated activities and, if not, the severity of the risk posed by him.

Having established these matters, it can be determined whether prohibition will be

necessary to achieve the Authority's regulatory objectives and what degree of prohibition

would best serve the achievement of those objectives in each case.

Financial penalties

23. Section 69 of the Act requires the Authority to issue a statement of its policy with

respect to the imposition of penalties on approved persons. Between 1 December 2004

and 27 August 2007, the Authority's policy in this regard was contained in ENF 13. In

deciding whether to exercise its power under section 66 in the case of any particular act

of misconduct, the Authority had regard to this statement.

24. ENF 13 stated that the principal purpose of financial penalties is to promote high

standards of regulatory conduct by deterring firms and approved persons who have

breached regulatory requirements from committing further contraventions, helping to

deter other firms and approved persons from committing contraventions, and

demonstrating generally to firms and approved persons the benefits of compliant

behaviour.

25. ENF 13.3.1G provided that the Authority would consider all the relevant circumstances of

a case when it determines the level of financial penalty (if any) that is appropriate and in

proportion to the breach concerned.

26. ENF 13.3.3G set out a non-exhaustive list of factors that may be relevant to determining

the appropriate level of financial penalty to be imposed on a person under the Act. The

following factors are relevant to this case:

The seriousness of the misconduct or contravention – ENF13.3.3G(1)

27. The Authority recognises the need for a financial penalty to be proportionate to the

nature and seriousness of the misconduct or contravention in question. Relevant factors

include the duration, frequency and impact of the misconduct, and the loss or risk of loss

caused to consumers.

The extent to which the breach was deliberate or reckless – ENF13.3.3G(2)

28. In determining whether a contravention or misconduct was deliberate, the Authority may

have regard to whether an approved person's behaviour was intentional, in that they

intended or foresaw the consequences of their actions. If the Authority decides that

behaviour was deliberate or reckless, it may be more likely to impose a higher penalty

on a firm or approved person than would otherwise be the case.

Whether the person on whom the penalty is to be imposed is an individual, and the

financial resources and other circumstances of the individual – ENF13.3.3G(3)

29. The Authority may take into account whether there is verifiable evidence of serious

financial hardship or financial difficulties if the firm or approved person were to pay the

level of penalty associated with the particular contravention or misconduct. The Authority

regards these factors as matters to be taken into account in determining the level of a

penalty, but not to the extent that there is a direct correlation between those factors and

the level of penalty.

Conduct following the contravention – ENF13.3.3G(5)

30. The Authority may take into account the conduct of the approved person, including the

degree of co-operation the person showed during the Authority’s investigation and any

remedial steps the person took after the contravention was identified.

Disciplinary record and compliance history – ENF13.3.3G(6)

31. The previous disciplinary record and general compliance history of the approved person

may be taken into account. This will include whether the Authority (or any previous

regulator) has taken any previous formal disciplinary action resulting in adverse findings

against the approved person, or whether the Authority has previously required the

person to take remedial action.

Previous action taken by the Authority– ENF13.3.3G(7)

32. The action that the Authority has taken previously in relation to similar behaviour by

other approved persons may be taken into account. The Authority will seek to ensure

consistency when it determines the appropriate level of penalty. If it has taken

disciplinary action previously in relation to a similar contravention or misconduct, this will

clearly be a relevant factor.