Final Notice
On , the Financial Conduct Authority issued a Final Notice to Paul Seakens
FINAL NOTICE
Dated:
14 JANUARY 2022
1.
PROPOSED ACTION
1.1
For the reasons given in this Notice, the Authority has decided to make an order,
pursuant to section 56 of the Act, prohibiting Mr Seakens 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
the date of this Notice.
2.
SUMMARY OF REASONS
2.1
As set out in more detail in the facts and matters described below, Mr Seakens
committed offences of converting criminal property (i.e. money laundering) and
fraudulent trading.
2.2
Given the nature and circumstances of the offending, the Authority considers that
Mr Seakens is not a fit and proper person to perform any function in relation to any
regulated activity carried on by any authorised or exempt persons or exempt
professional persons. This is because he lacks the necessary honesty, integrity and
reputation.
2.3
As a result of his lack of honesty, integrity and reputation, Mr Seakens poses a
serious threat to consumers and to confidence in the financial system. Therefore,
it is appropriate, in order to advance the Authority’s statutory objectives (which
include protecting consumers and the integrity of the UK financial system), to
impose a prohibition order on him, as detailed above.
3.
DEFINITIONS
3.1
The definitions below are used in this Final Notice (and in Annexes A and B):
“the Act” means the Financial Services and Markets Act 2000;
“the Authority” means the Financial Conduct Authority;
“the Decision Notice” means the decision notice give to Mr Seakens on 6 December
2021;
“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;
“OCL” means Opus Capital Limited (now in liquidation), which was previously
authorised and regulated by the Authority;
“RDC” means the Regulatory Decisions Committee of the Authority (see further
under Procedural Matters below);
“Mr Seakens” means Paul Seakens; and
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).
4.
RELEVANT STATUTORY PROVISIONS
4.1
The statutory and regulatory provisions relevant to this Final Notice are set out in
Annex A.
5.
FACTS AND MATTERS
5.1
Mr Seakens has been the director of OCL since 19 November 2010. He was
approved by the Authority to perform the CF1 (Director), CF10 (Compliance
Oversight), CF11 (Money Laundering Reporting) and CF30 (Customer) functions at
OCL from 8 November 2010 to 15 March 2017.
5.2
On 12 May 2021, at Southwark Crown Court, Mr Seakens was tried and convicted
of one count of fraudulent trading and four counts of converting criminal property.
5.3
On 28 May 2021, Mr Seakens was sentenced to 13 years’ imprisonment and was
disqualified as a director for 12 years under section 2 of the Company Directors
Disqualification Act 1986.
5.4
Between 2011 and 2014, Mr Seakens used OCL (trading as Carbon Neutral
Investments Ltd) as a vehicle to create and operate a fraudulent clearing business.
This enabled a system in which carbon credits were sourced and supplied to Mr
Seakens and OCL which were ultimately sold to investors by third party brokers.
5.5
The judge who passed sentence on Mr Seakens stated that investors who gave
money to Mr Seakens’ clearing business were reliant on information which Mr
Seakens knew to be untrue and misleading. The carbon credits were worthless and
did not offer investors any prospect of making a profit or recovering their
investment. Mr Seakens’ business cleared approximately £36 million of investor
monies, of which over £600,000 comprised expenses put through the business, a
large part of which was of benefit to Mr Seakens. Mr Seakens also sent £3.2 million
of investor monies to unknown overseas accounts and has failed to disclose the
beneficiaries of those accounts.
5.6
The sentencing judge stated that the total amount involved in the overall fraud was
approximately £36 million. The investors included elderly people who suffered a
negative impact on their health and retirement, and others had to re-mortgage or
sell their homes.
5.7
Mr Seakens was described by the sentencing judge as being at the centre of the
fraud: he was one of the masterminds behind the fraud and was one of the
recipients of the benefits from it.
5.8
Mr Seakens’ lack of honesty was also highlighted by the sentencing judge, who
remarked that “not a single word” from Mr Seakens could be trusted, and that Mr
Seakens had engaged in “lies, half-truths… [and] distortions of the truth”. The
sentencing judge also referred to his “complete contempt for the truth”. She stated
that he misled and deliberately ignored warnings from relevant authorities and,
when his clearing accounts were closed by the banks, misled other banks in order
to open new accounts. He also misled carbon credit registries.
5.9
Through the Decision Notice, the Authority gave notice of its decision to take the
action described in paragraph 1 above. Mr Seakens did not refer the matter to the
Tribunal within 28 days of the date on which the Decision Notice was issued to him.
5.10
The Authority therefore makes an order prohibiting Mr Seakens from performing
any function in relation to any regulated activity carried on by an authorised person,
exempt person or exempt professional firm, for the reasons described above.
6.
REPRESENTATIONS
6.1
Annex B contains a brief summary of the key representations made by Mr Seakens
and how they have been dealt with. In making the decision which gave rise to the
obligation to give this Notice, the Authority has taken into account all the
representations made, whether or not set out in Annex B.
7.
PROCEDURAL MATTERS
7.1
This Notice is given to Mr Seakens under, and in accordance with, section 390 of
the Act. The following paragraphs are important.
Decision Maker
7.2
The decision which gave rise to the obligation to give this Notice was made by the
RDC. The RDC is a committee of the Authority which takes certain decisions on
behalf of the Authority. The members of the RDC are separate to the Authority staff
involved in conducting investigations and recommending action against firms and
individuals. Further information about the RDC can be found on the Authority’s
website:
Confidentiality and publicity
7.3
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. However, the Authority must not
publish information if such publication would, in the opinion of the Authority, be
unfair to Mr Seakens or prejudicial to the interests of consumers or detrimental to
the stability of the UK financial system.
Authority Contacts
7.4
For more information concerning this matter generally, contact Saad Nasarullah
(direct line: 020 7066 1940) of the Enforcement and Market Oversight Division of
the Authority.
Anna Couzens
Manager, Threshold Conditions Team
Enforcement and Market Oversight Division
Financial Conduct Authority
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
regulatory 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,
among 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 9.3.2 states that, when the Authority decides to make a prohibition order
against an approved person and/or withdraw their approval, the Authority will
consider all the relevant circumstances of the case. These may include, but are not
limited to: 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 and specified significant-harm
functions
8.
The Authority has issued guidance on the fitness and propriety of individuals in FIT.
9.
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.
10.
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 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.”
11.
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 offences including dishonesty, fraud
and financial crime (amongst other things).
ANNEX B
REPRESENTATIONS
1. A summary of Mr Seakens’ key representations, and (in bold type) the Authority’s
conclusions in respect of them, is set out below.
The prohibition order is not necessary
2. Mr Seakens has not been regulated by the Authority since 2017, is not seeking to be
regulated, and is not in any position to hold a regulated position. The proposal to make
the prohibition order would appear to be about “PR” for the Authority rather than having
any practical use.
3. Alternatively, the matter could be dealt with by way of an undertaking by Mr Seakens
not to take on a function in a firm regulated by the Authority for which the Authority’s
approval is required.
4. The Authority acknowledges that there are practical restrictions on Mr Seakens’
ability to be involved in regulated activities while he remains in prison.
Nevertheless, the Authority considers that, even while Mr Seakens remains in
prison, there is a risk to consumers and to the integrity of the markets due to
his lack of fitness and propriety, which makes a prohibition order appropriate.
The Authority also notes that Mr Seakens will, in due course, be released from
prison, at which point such risk is likely to increase.
5. Further, the order set out in this Notice goes beyond a prohibition on Mr
Seakens’ becoming an approved person, or seeking authorisation for a business
under his control; it prohibits him from performing any function in relation to
any regulated activity carried on by an authorised person, exempt person or
exempt professional firm.
6. The Authority notes that the prohibition order will send a message to the market
and to consumers about the Authority’s approach regarding Mr Seakens’
conduct and his lack of fitness and propriety. That will be the case whatever
the practical restrictions on Mr Seakens’ ability to become involved in regulated
activities.
7. The Authority does not consider that an undertaking by Mr Seakens would be
an acceptable alternative to a prohibition order. In any event, the order set out
in this Notice goes beyond the scope of the undertaking suggested by Mr
Seakens; as noted above, it prohibits him from performing any function in
relation to any regulated activity carried on by an authorised person, exempt
person or exempt professional firm (not merely any function for which the
Authority’s approval is required).
The scope of any prohibition order
8. The prohibition order is too wide. While Mr Seakens can see the purpose in preventing
him from carrying out a customer-facing function, on the completion of his sentence
there is no reason for him not to carry out, say, a SMF16 (compliance oversight) or
SMF17 (money laundering reporting) senior management function.
9. The Authority considers Mr Seakens lacks honesty and integrity, such that he is
not fit to perform any function in financial services. Given the nature and gravity
of his offences, which are offences of dishonesty, the Authority considers that
Mr Seakens’ views in respect of his fitness for the SMF 16 and SMF 17 roles
show that he lacks insight into his wrongdoing. As such, they support the
Authority’s view that Mr Seakens lacks fitness and propriety and that a full
prohibition order is appropriate.
The length of any order
10. The prohibition order should be in place for the period of Mr Seakens’ prison sentence
rather than indefinitely; the Authority should give some recognition for the “period of
rehabilitation” which will have been undertaken.
11. The Authority does not have power to impose a prohibition order which is
limited in time. It may indicate in the decision notice that it would be minded
to revoke the order on the application of the individual in the future, in the
absence of new evidence that the individual is not fit and proper, specifying the
number of years after which it would be minded to revoke or vary the
prohibition on an application. However, the Authority will only adopt this
approach in cases where it considers it appropriate in all the circumstances. The
Authority does not consider that this is such a case; in particular, taking into
account the seriousness of the offences of dishonesty committed by Mr Seakens
and his apparent lack of insight into his offending. These do not provide any
indication that it is likely he will have become fit and proper by the time of his
release from prison, or after any particular number of years.
12. Nevertheless, Mr Seakens may apply at any time to the Authority for the
revocation of the prohibition order; if he does so, the Authority will consider his
application in the light of all the circumstances at the relevant time.
Inaccuracies in the facts and matters
13. Contrary to what is stated in paragraph 5.5 of this Notice, the carbon credits had a clear
value.
14. The Authority notes that the statement in paragraph 5.5 - that the carbon
credits were worthless and did not offer investors any prospect of making a
profit or recovering their investment - reflects a remark by the sentencing
judge. The Authority considers that there is no basis to doubt its accuracy.
15. The figure of £600,000 given in relation to the benefit to Mr Seakens is incorrect. The
correct figure is £300,000 and the additional £300,000 consisted of business expenses
incurred by OCL.
16. The Authority considers this to be incorrect. In her remarks the sentencing
judge said: “In relation to … benefits, as the documents show, you were anxious
that those documents only show a modest benefit to yourself. You declare an
annual income to the taxman of £22,000 a year. Receipts into your bank account
are considerably more. Emails show how a car that you had [and] another you
wanted were to be pool cars to avoid taxation. Expenses were put through your
company including your personal rent, housing costs and even some food. I
shall not recite the list of expenses in full but they totalled over £600,000, a
large [part] of which was benefit to you. Your claim is that at the most you
benefited by £300,000 …, I do not accept that, you have seen the benefit far
more than that”.
17. The £3.2m of overseas payments referred to in paragraph 5.5 were unidentified because
the City of London Police failed to ask the relevant bank where the payments were sent.
The identification of those payments’ beneficiaries is subject to ongoing legal process, in
which Mr Seakens will aim to provide clear identification of the beneficiaries involved, so
it is not appropriate to suggest that he was the beneficiary.
18. The Authority considers that it is clear from the sentencing judge’s remarks that
Mr Seakens knew where the payments in question were sent but had failed to
disclose the beneficiaries. The judge said: “During the evidence we heard that
money has been sent abroad. It is not clear exactly how much, but at least
£5.6m. When asked about this by the Insolvency Service, you produced invoices
for £2.4 million… which leaves £3.2 million unaccounted for. In evidence you
said you did not know where this money is […] One thing that is certain is that
you know where that money went. You were in sole control of the bank accounts
and you authorised it being sent abroad.” The Authority notes that these
remarks (and the relevant part of paragraph 5.5) reach no conclusion as to the
identity of the beneficiaries of the £3.2 million referred to.
19. There was no direct evidence presented during Mr Seakens’ trial of any relationship
between the purchase of carbon credits and investors’ ill health, nor of investors having
to re-mortgage or sell their homes, as stated in paragraph 5.6 of this Notice.
20. The Authority considers it to be clear from the sentencing judge’s remarks that
there was evidence of such a relationship. She stated: “A number of the
investors were elderly, some have been unable to buy essential items needed
due to ill health. … Their health has been affected, they have felt shame and no
longer trust those around them. They have been unable to assist family with
education and living expenses. Some have had to re-mortgage their homes or
sell them.”
Superfluous material in the facts and matters
21. The material set out in paragraph 5.8 of this Notice is superfluous and should not be
included.
22. The Authority considers that the sentencing judge’s remarks, referred to in
paragraph 5.8, are relevant to this matter, as they go to the extent of Mr
Seakens’ lack of honesty and integrity; as such, they are material to its
conclusion that he lacks fitness and propriety.
Omission from the facts and matters
23. It should be stated in paragraph 5.4 that the carbon credit clearing business was
unregulated business not subject to the Authority’s Handbook.
24. The Authority considers this fact to have no bearing on its conclusion as to Mr
Seakens’ fitness and propriety.
Dated:
14 JANUARY 2022
1.
PROPOSED ACTION
1.1
For the reasons given in this Notice, the Authority has decided to make an order,
pursuant to section 56 of the Act, prohibiting Mr Seakens 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
the date of this Notice.
2.
SUMMARY OF REASONS
2.1
As set out in more detail in the facts and matters described below, Mr Seakens
committed offences of converting criminal property (i.e. money laundering) and
fraudulent trading.
2.2
Given the nature and circumstances of the offending, the Authority considers that
Mr Seakens is not a fit and proper person to perform any function in relation to any
regulated activity carried on by any authorised or exempt persons or exempt
professional persons. This is because he lacks the necessary honesty, integrity and
reputation.
2.3
As a result of his lack of honesty, integrity and reputation, Mr Seakens poses a
serious threat to consumers and to confidence in the financial system. Therefore,
it is appropriate, in order to advance the Authority’s statutory objectives (which
include protecting consumers and the integrity of the UK financial system), to
impose a prohibition order on him, as detailed above.
3.
DEFINITIONS
3.1
The definitions below are used in this Final Notice (and in Annexes A and B):
“the Act” means the Financial Services and Markets Act 2000;
“the Authority” means the Financial Conduct Authority;
“the Decision Notice” means the decision notice give to Mr Seakens on 6 December
2021;
“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;
“OCL” means Opus Capital Limited (now in liquidation), which was previously
authorised and regulated by the Authority;
“RDC” means the Regulatory Decisions Committee of the Authority (see further
under Procedural Matters below);
“Mr Seakens” means Paul Seakens; and
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).
4.
RELEVANT STATUTORY PROVISIONS
4.1
The statutory and regulatory provisions relevant to this Final Notice are set out in
Annex A.
5.
FACTS AND MATTERS
5.1
Mr Seakens has been the director of OCL since 19 November 2010. He was
approved by the Authority to perform the CF1 (Director), CF10 (Compliance
Oversight), CF11 (Money Laundering Reporting) and CF30 (Customer) functions at
OCL from 8 November 2010 to 15 March 2017.
5.2
On 12 May 2021, at Southwark Crown Court, Mr Seakens was tried and convicted
of one count of fraudulent trading and four counts of converting criminal property.
5.3
On 28 May 2021, Mr Seakens was sentenced to 13 years’ imprisonment and was
disqualified as a director for 12 years under section 2 of the Company Directors
Disqualification Act 1986.
5.4
Between 2011 and 2014, Mr Seakens used OCL (trading as Carbon Neutral
Investments Ltd) as a vehicle to create and operate a fraudulent clearing business.
This enabled a system in which carbon credits were sourced and supplied to Mr
Seakens and OCL which were ultimately sold to investors by third party brokers.
5.5
The judge who passed sentence on Mr Seakens stated that investors who gave
money to Mr Seakens’ clearing business were reliant on information which Mr
Seakens knew to be untrue and misleading. The carbon credits were worthless and
did not offer investors any prospect of making a profit or recovering their
investment. Mr Seakens’ business cleared approximately £36 million of investor
monies, of which over £600,000 comprised expenses put through the business, a
large part of which was of benefit to Mr Seakens. Mr Seakens also sent £3.2 million
of investor monies to unknown overseas accounts and has failed to disclose the
beneficiaries of those accounts.
5.6
The sentencing judge stated that the total amount involved in the overall fraud was
approximately £36 million. The investors included elderly people who suffered a
negative impact on their health and retirement, and others had to re-mortgage or
sell their homes.
5.7
Mr Seakens was described by the sentencing judge as being at the centre of the
fraud: he was one of the masterminds behind the fraud and was one of the
recipients of the benefits from it.
5.8
Mr Seakens’ lack of honesty was also highlighted by the sentencing judge, who
remarked that “not a single word” from Mr Seakens could be trusted, and that Mr
Seakens had engaged in “lies, half-truths… [and] distortions of the truth”. The
sentencing judge also referred to his “complete contempt for the truth”. She stated
that he misled and deliberately ignored warnings from relevant authorities and,
when his clearing accounts were closed by the banks, misled other banks in order
to open new accounts. He also misled carbon credit registries.
5.9
Through the Decision Notice, the Authority gave notice of its decision to take the
action described in paragraph 1 above. Mr Seakens did not refer the matter to the
Tribunal within 28 days of the date on which the Decision Notice was issued to him.
5.10
The Authority therefore makes an order prohibiting Mr Seakens from performing
any function in relation to any regulated activity carried on by an authorised person,
exempt person or exempt professional firm, for the reasons described above.
6.
REPRESENTATIONS
6.1
Annex B contains a brief summary of the key representations made by Mr Seakens
and how they have been dealt with. In making the decision which gave rise to the
obligation to give this Notice, the Authority has taken into account all the
representations made, whether or not set out in Annex B.
7.
PROCEDURAL MATTERS
7.1
This Notice is given to Mr Seakens under, and in accordance with, section 390 of
the Act. The following paragraphs are important.
Decision Maker
7.2
The decision which gave rise to the obligation to give this Notice was made by the
RDC. The RDC is a committee of the Authority which takes certain decisions on
behalf of the Authority. The members of the RDC are separate to the Authority staff
involved in conducting investigations and recommending action against firms and
individuals. Further information about the RDC can be found on the Authority’s
website:
Confidentiality and publicity
7.3
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. However, the Authority must not
publish information if such publication would, in the opinion of the Authority, be
unfair to Mr Seakens or prejudicial to the interests of consumers or detrimental to
the stability of the UK financial system.
Authority Contacts
7.4
For more information concerning this matter generally, contact Saad Nasarullah
(direct line: 020 7066 1940) of the Enforcement and Market Oversight Division of
the Authority.
Anna Couzens
Manager, Threshold Conditions Team
Enforcement and Market Oversight Division
Financial Conduct Authority
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
regulatory 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,
among 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 9.3.2 states that, when the Authority decides to make a prohibition order
against an approved person and/or withdraw their approval, the Authority will
consider all the relevant circumstances of the case. These may include, but are not
limited to: 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 and specified significant-harm
functions
8.
The Authority has issued guidance on the fitness and propriety of individuals in FIT.
9.
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.
10.
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 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.”
11.
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 offences including dishonesty, fraud
and financial crime (amongst other things).
ANNEX B
REPRESENTATIONS
1. A summary of Mr Seakens’ key representations, and (in bold type) the Authority’s
conclusions in respect of them, is set out below.
The prohibition order is not necessary
2. Mr Seakens has not been regulated by the Authority since 2017, is not seeking to be
regulated, and is not in any position to hold a regulated position. The proposal to make
the prohibition order would appear to be about “PR” for the Authority rather than having
any practical use.
3. Alternatively, the matter could be dealt with by way of an undertaking by Mr Seakens
not to take on a function in a firm regulated by the Authority for which the Authority’s
approval is required.
4. The Authority acknowledges that there are practical restrictions on Mr Seakens’
ability to be involved in regulated activities while he remains in prison.
Nevertheless, the Authority considers that, even while Mr Seakens remains in
prison, there is a risk to consumers and to the integrity of the markets due to
his lack of fitness and propriety, which makes a prohibition order appropriate.
The Authority also notes that Mr Seakens will, in due course, be released from
prison, at which point such risk is likely to increase.
5. Further, the order set out in this Notice goes beyond a prohibition on Mr
Seakens’ becoming an approved person, or seeking authorisation for a business
under his control; it prohibits him from performing any function in relation to
any regulated activity carried on by an authorised person, exempt person or
exempt professional firm.
6. The Authority notes that the prohibition order will send a message to the market
and to consumers about the Authority’s approach regarding Mr Seakens’
conduct and his lack of fitness and propriety. That will be the case whatever
the practical restrictions on Mr Seakens’ ability to become involved in regulated
activities.
7. The Authority does not consider that an undertaking by Mr Seakens would be
an acceptable alternative to a prohibition order. In any event, the order set out
in this Notice goes beyond the scope of the undertaking suggested by Mr
Seakens; as noted above, it prohibits him from performing any function in
relation to any regulated activity carried on by an authorised person, exempt
person or exempt professional firm (not merely any function for which the
Authority’s approval is required).
The scope of any prohibition order
8. The prohibition order is too wide. While Mr Seakens can see the purpose in preventing
him from carrying out a customer-facing function, on the completion of his sentence
there is no reason for him not to carry out, say, a SMF16 (compliance oversight) or
SMF17 (money laundering reporting) senior management function.
9. The Authority considers Mr Seakens lacks honesty and integrity, such that he is
not fit to perform any function in financial services. Given the nature and gravity
of his offences, which are offences of dishonesty, the Authority considers that
Mr Seakens’ views in respect of his fitness for the SMF 16 and SMF 17 roles
show that he lacks insight into his wrongdoing. As such, they support the
Authority’s view that Mr Seakens lacks fitness and propriety and that a full
prohibition order is appropriate.
The length of any order
10. The prohibition order should be in place for the period of Mr Seakens’ prison sentence
rather than indefinitely; the Authority should give some recognition for the “period of
rehabilitation” which will have been undertaken.
11. The Authority does not have power to impose a prohibition order which is
limited in time. It may indicate in the decision notice that it would be minded
to revoke the order on the application of the individual in the future, in the
absence of new evidence that the individual is not fit and proper, specifying the
number of years after which it would be minded to revoke or vary the
prohibition on an application. However, the Authority will only adopt this
approach in cases where it considers it appropriate in all the circumstances. The
Authority does not consider that this is such a case; in particular, taking into
account the seriousness of the offences of dishonesty committed by Mr Seakens
and his apparent lack of insight into his offending. These do not provide any
indication that it is likely he will have become fit and proper by the time of his
release from prison, or after any particular number of years.
12. Nevertheless, Mr Seakens may apply at any time to the Authority for the
revocation of the prohibition order; if he does so, the Authority will consider his
application in the light of all the circumstances at the relevant time.
Inaccuracies in the facts and matters
13. Contrary to what is stated in paragraph 5.5 of this Notice, the carbon credits had a clear
value.
14. The Authority notes that the statement in paragraph 5.5 - that the carbon
credits were worthless and did not offer investors any prospect of making a
profit or recovering their investment - reflects a remark by the sentencing
judge. The Authority considers that there is no basis to doubt its accuracy.
15. The figure of £600,000 given in relation to the benefit to Mr Seakens is incorrect. The
correct figure is £300,000 and the additional £300,000 consisted of business expenses
incurred by OCL.
16. The Authority considers this to be incorrect. In her remarks the sentencing
judge said: “In relation to … benefits, as the documents show, you were anxious
that those documents only show a modest benefit to yourself. You declare an
annual income to the taxman of £22,000 a year. Receipts into your bank account
are considerably more. Emails show how a car that you had [and] another you
wanted were to be pool cars to avoid taxation. Expenses were put through your
company including your personal rent, housing costs and even some food. I
shall not recite the list of expenses in full but they totalled over £600,000, a
large [part] of which was benefit to you. Your claim is that at the most you
benefited by £300,000 …, I do not accept that, you have seen the benefit far
more than that”.
17. The £3.2m of overseas payments referred to in paragraph 5.5 were unidentified because
the City of London Police failed to ask the relevant bank where the payments were sent.
The identification of those payments’ beneficiaries is subject to ongoing legal process, in
which Mr Seakens will aim to provide clear identification of the beneficiaries involved, so
it is not appropriate to suggest that he was the beneficiary.
18. The Authority considers that it is clear from the sentencing judge’s remarks that
Mr Seakens knew where the payments in question were sent but had failed to
disclose the beneficiaries. The judge said: “During the evidence we heard that
money has been sent abroad. It is not clear exactly how much, but at least
£5.6m. When asked about this by the Insolvency Service, you produced invoices
for £2.4 million… which leaves £3.2 million unaccounted for. In evidence you
said you did not know where this money is […] One thing that is certain is that
you know where that money went. You were in sole control of the bank accounts
and you authorised it being sent abroad.” The Authority notes that these
remarks (and the relevant part of paragraph 5.5) reach no conclusion as to the
identity of the beneficiaries of the £3.2 million referred to.
19. There was no direct evidence presented during Mr Seakens’ trial of any relationship
between the purchase of carbon credits and investors’ ill health, nor of investors having
to re-mortgage or sell their homes, as stated in paragraph 5.6 of this Notice.
20. The Authority considers it to be clear from the sentencing judge’s remarks that
there was evidence of such a relationship. She stated: “A number of the
investors were elderly, some have been unable to buy essential items needed
due to ill health. … Their health has been affected, they have felt shame and no
longer trust those around them. They have been unable to assist family with
education and living expenses. Some have had to re-mortgage their homes or
sell them.”
Superfluous material in the facts and matters
21. The material set out in paragraph 5.8 of this Notice is superfluous and should not be
included.
22. The Authority considers that the sentencing judge’s remarks, referred to in
paragraph 5.8, are relevant to this matter, as they go to the extent of Mr
Seakens’ lack of honesty and integrity; as such, they are material to its
conclusion that he lacks fitness and propriety.
Omission from the facts and matters
23. It should be stated in paragraph 5.4 that the carbon credit clearing business was
unregulated business not subject to the Authority’s Handbook.
24. The Authority considers this fact to have no bearing on its conclusion as to Mr
Seakens’ fitness and propriety.