An Addendum was added to this Final Notice on 25 March 2014 to note
comments made by the Tribunal in its decision of 10 December 2012

FINAL NOTICE

FSA
Reference
Number:
TWR01007

Address:
UNIT 2/859 Toorak Road

Hawthorn East

VIC 3123

Australia


Date:
7 January 2013

ACTION

1. For the reasons given in this notice, the FSA hereby imposes on Mr Reeh a
financial penalty of £10,000.

SUMMARY OF REASONS

2. The FSA gave Mr Reeh a Decision Notice on 13 August 2010 which notified
him that the FSA had decided to impose a financial penalty of £170,000
(reduced to £50,000 due to Mr Reeh’s financial circumstances) on him
pursuant to section 66 of the Financial Services and Markets Act 2000 (“the
Act”) and make a prohibition order pursuant to section 56 of the Act.

3. On 19 September 2010 Mr Reeh referred this Decision Notice to the Upper
Tribunal (Tax and Chancery Chamber) (“the Tribunal”). The written decision
of the Tribunal was released on 10 December 2012 and can be found on the
Tribunal’s website.

4. The Tribunal determined that the FSA should impose on Mr Reeh a financial
penalty of £10,000 pursuant to section 66 of the Act. The Tribunal considered
that Mr Reeh’s conduct warranted a penalty of £75,000, but reduced the figure
due to Mr Reeh’s financial circumstances. The Tribunal did not consider it
appropriate to direct the FSA to impose a prohibition order.

5. Mr Reeh’s misconduct occurred between September 2006 and November
2007 (“the relevant period”) whilst he was CEO at Black and White Group
Limited (“Black and White”), a company which specialised in arranging
mortgages and associated insurance.

6. In summary, the Tribunal found that during the relevant period Mr Reeh:

i. Pressurised Black and White advisers to sell single premium Payment
Protection Insurance without due regard to the suitability of the product
for individual customers;

ii. pressurised advisers to sell products provided by a particular lender,
Money Partners Limited, without due regard to their suitability for the
customer;

iii. failed, but only to some degree, in his duty to take reasonable steps to
ensure that Black and White had in place adequate compliance systems
to ensure the suitability of advice given to its customers;

iv. set a ‘tone from the top’ at Black and White that focused on profit, cash
flow and the increase of sales potentially at the expense of the fair
treatment of its customers; and

v. failed in his duty promptly to provide the FSA with accurate information
regarding Black and White’s capital adequacy position and, on one
occasion, misled the FSA about these matters.

FAILINGS

7. The regulatory provisions relevant to this Final Notice are referred to in
Annex A.

8. The Tribunal found that during the relevant period Mr Reeh’s conduct
amounted to a breach of Principle 1 and Principle 7 of the FSA’s Statement of
Principles for Approved Persons (“APER”). The Tribunal also found that
during the relevant period Mr Reeh was knowingly concerned in Black and
White’s breach of Principle 6 of the FSA’s Principles for Businesses
(“PRIN”).

SANCTION

9. The FSA imposes a financial penalty of £10,000 on Mr Reeh.

PROCEDURAL MATTERS

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

Manner of and time for Payment

11. The financial penalty must be paid in full by Mr Reeh to the FSA by no later
than 21 January 2013, 14 days from the date of the Final Notice.

If the financial penalty is not paid

12. If all or any of the financial penalty is outstanding on 22 January 2013, the
FSA may recover the outstanding amount as a debt owed by Mr Reeh and due
to the FSA.

13. 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 FSA must publish such information about the matter to which
this notice relates as the FSA considers appropriate. The information may be
published in such manner as the FSA considers appropriate. However, the
FSA may not publish information if such publication would, in the opinion of
the FSA, be unfair to you or prejudicial to the interests of consumers.

14. The FSA intends to publish such information about the matter to which this
Final Notice relates as it considers appropriate.

FSA contacts

15. For more information concerning this matter generally, contact Greg
Sachrajda (direct line: 020 7066 3746 /fax: 020 7066 3747) of the
Enforcement and Financial Crime Division of the FSA.

Head of Department
FSA Enforcement and Financial Crime Division


ADDENDUM

Paragraph 129 of the Tribunal Decision (referred to in paragraph 3 of this Final
Notice) reads as follows:

“We have received further detailed submissions from Mr Reeh in which he addresses
not just hardship but comparable penalties in other cases and the treatment of another
colleague who did not contest the findings of the Authority. At one point the
Authority considered that a penalty of £50,000 would have been appropriate for the
company’s former Chief Operating Officer. He also sets out up to date detail about
his domestic commitments and very limited resources. While the Authority complains
about Mr Reeh’s disclosure, he has met the standard imposed by the Family courts in
Australia. He has also spent substantial sums on his legal representation in this case.
Further he has provided information about the way in which he has built a promising
new career in financial services in Australia working for a large institution and also
doing charitable service in his community. While the delays in bringing this case on
are regrettable they have given Mr Reeh an opportunity to rehabilitate himself to a
degree not common in similar cases before this Tribunal. It would be wrong for us to
impose a penalty which would have the effect of bringing this fresh start to an end.
Having regard to his circumstances and the potential hardship which a higher penalty
would impose on his young family, Mr Reeh will pay the sum of £10,000.”


ANNEX A

1.
Relevant Statutory Provisions and Guidance

Statutory Provisions

1.1.
The FSA’s regulatory objectives are set out in section 2(2) of the Act and
include the protection of consumers.

1.2.
Section 66 of the Act provides:

(1) “The Authority may take action against a person under this section
if –

(a) it appears to the Authority that he is guilty of misconduct;
and

(b) the Authority is satisfied that it is appropriate in all the
circumstances to take action against him.

(2) A person is guilty of misconduct if, while an approved person –

(a) he has failed to comply with a statement of principle issued
under section 64; or

(b) he has been knowingly concerned in a contravention by the
relevant authorised person of a requirement imposed on that
authorised person by or under this Act.

(3) If the Authority is entitled to take action under this section against a
person, it may…impose a penalty on him of such amount as it considers
appropriate;”



Statement of Principles and Code of Conduct for Approved Persons

1.3.
The Statements of Principles and Code of Conduct for Approved Persons are
issued under section 64 of the Act.

1.4.
Statement of Principle 1 states “An approved person must act with integrity in
carrying out his controlled function”.

1.5.
Statement of Principle 7 states “An approved person performing a significant
influence function must take reasonable steps to ensure that the business of
the firm for which he is responsible in his controlled function complies with
the relevant requirements and standards of the regulatory system.

Principles for Business

1.6.
The FSA’s Principle’s for Businesses (“PRIN”) are a general statement of the
fundamental obligations of firms under the regulatory system and are set out

in the FSA’s Handbook. They derive their authority from the FSA’s rule-
making powers as set out in the Act and reflect the FSA’s regulatory
objectives. The relevant Principle in this instance is as follows:

Principle 6 (Customers’ interests): “A firm must pay due regard to the
interests of its customers and treat them fairly”