Identifying individuals in FCA regulatory notices – Macris applied

Back in March 2017, the Supreme Court handed down its decision in Financial Conduct Authority v Macris [2017] UKSC 19. We have previously reported on that decision on its way to the Supreme Court and following the judgment.

In brief, Section 393 of the Financial Services and Markets Act 2000 (“FSMA”) provides individuals identified in an FCA notice with third party rights to be provided with a copy of the notice and an opportunity to make representations regarding the notice. Much then turns on whether an individual has been identified in the notice or not.

  1. Lord Sumption found that a person would be identified in a section 393 FSMA notice where “he is identifiable by name or by a synonym for him, such as his office or job title”. Where a synonym was used it must be clear from the notice that the synonym only related to one individual, and the individual must be identifiable from the notice itself or from publicly available information. Extrinsic information can only be used to help with interpreting the language used in the notice rather than supplementing it, i.e. it can only be used to the extent it is necessary to understand what the notice means.
  2. Lord Neuberger (agreeing with Lord Sumption) looked to the wording of section 393 FMSA itself, finding that the language used “appears to stipulate that the person must be identified in the notice, not that he must be identifiable as a result of the notice”. In that regard the notice must be “equivalent to naming him”.

In Cooper v Financial Conduct Authority [2017] UKUT 0428 (TCC) the Upper Tribunal has had its first opportunity to apply the Macris decision, and in doing so found that Mr Cooper had not been identified. A two-stage approach to the question was used, considering each of the two tests identified above. Continue Reading

European Commission conducts dawn raids to ease provision of data to fintech firms

It has recently been reported that the European Commission carried out a series of dawn raids at the premises of a number of entities involved in the banking sector “in a few” EU member states including, reportedly, the Polish and Dutch Banking Associations.

The raids related to the alleged delay by banks providing data requested by account holders that they requested be provided to a number of fintech firms. The raids were carried out on those suspected of deliberately delaying the provision of the data requested.

The Commission’s press release concerning the raids stated:

“The Commission has concerns that the companies involved and/or the associations representing them may have engaged in anti-competitive practices in breach of EU antitrust rules that prohibit cartels and restrictive business practices and/or abuse of dominant market positions (Articles 101 and 102 respectively of the Treaty on the Functioning of the European Union). These alleged anti-competitive practices are aimed at excluding non-bank owned providers of financial services by preventing them from gaining access to bank customers’ account data, despite the fact that the respective customers have given their consent to such access.”

The EU is on a drive to shake up Europe’s retail banking sector with the implementation of Directive (EU) 2015/2366 , known as the Payment Services Directive 2, in January 2018. These regulations will oblige banks to grant third parties access to account data where customers have consented. The purpose of the regulations is to encourage innovative technology companies to join, some would say disrupt, the market and give consumers greater control of their data.

As a result of the implementation of the Directive third party companies (including the likes of Amazon and Facebook) would have access to the data of consenting customers. In turn these disrupters can then handle payments and offer tailored financial advice to customers. In return, the non-bank companies will have to comply with data protection rules.

This is perceived by many to be yet a further threat to the current retail banking system already under threat from so-called challenger banks who have recently entered the market.

The Commission will now analyse the results of the raids and those raided will be able to submit observations, and if necessary, be heard in any subsequent proceedings.

Those having difficulty in the UK are entitled to make a complaint to the Commission or UK banking authorities in order to reduce any delay.

Mastercard: the saga continues…

Further to our recent blog posts regarding the long running litigation, last week the Supreme Court ordered that permission to appeal be granted to the Claimants in MasterCard Incorporated and others (Respondents) v Deutsche Bahn AG and others (Appellants) – UKSC 2017/0095. The appeal concerns prospective amendments to the Claimants’ case in the litigation which would introduce new claims against Mastercard based upon MasterCard’s central acquiring rules (which concern cross border transactions and related fees imposed by MasterCard).

Continue Reading

Supreme Court Shakes-Up the Test for Criminal Dishonesty

Cheating is cheating no matter what differing standards you hold yourself to.

Following the Supreme Court’s recent decision in Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent) [2017] a defendant in a fraud case can no longer rely on the argument that he thought what he was doing was acceptable. If you have been dishonest within the reasonable person’s concept of dishonesty, you’re out. That’s the principle that the Supreme Court wanted to bring home as it effectively merged the civil and criminal tests for dishonesty.

Continue Reading

Overcoming the principle of “reflective loss”

In an important recent decision the Commercial Court confirmed the availability of specific performance of a shareholder’s rights under shareholder agreements as a means to dodge the difficulties created for shareholders by the principle of ‘reflective loss’.

Background Facts 

Oceanic Trans Shipping Est was one of three shareholders in two joint venture companies, who owned two very large crude oil carriers (“VLCCs”). The other shareholders were Latin American Investments Limited and Maroil Shipping Inc.

The shareholders were party to two shareholder agreements, under which the VLCCs had been made available to Sea Pioneer Shipping Corporation, which entered into a contract of affreightment (“CoA”) with an oil company, P. P subsequently assigned its rights under the CoA to the JV companies.

Disputes arose between the JV companies and P, which Maroil and Sea Pioneer settled without Oceanic’s consent. The settlement sum was approximately US$30 million. Continue Reading

Husband and wife investment advisors banned from working in financial services by the FCA for lack of integrity after concealing their assets

Last week the FCA announced that it had banned Mr John Chiesa and his wife Mrs Colette Chiesa from working in financial services for the “calculated way” that they deceived creditors after going into “sequestration” (the Scottish term for bankruptcy). Mrs Chiesa was also fined £50,000 for attempting to mislead the FCA during an FCA interview.

Continue Reading

FOS decisions are not arbitral awards

The High Court recently considered whether a decision made by the Financial Ombudsman Service is a decision made under an arbitration agreement and so appealable under the Arbitration Act 1996.

Background to the application

Back in 2011 a Mr Wayne Charlton invested in a self-administered personal pension (a “SIPP”) administered by Berkeley Burke. After one of the companies invested in by the SIPP was investigated by the Serious Fraud Office and went into receivership, Mr Charlton made a complaint against Berkeley Burke to the FOS. Continue Reading

Excellent turnout for the inaugural MLROs.com Northern Conference hosted by Squire Patton Boggs’ Birmingham office.

Founded in 2005 with 140 members, MLROs.com lead the way in ensuring that that financial institutions and practitioners are educated, supported and empowered to stop financial criminals.

The very first MLROs.com Northern conference took place in Birmingham on Wednesday 11th October 2017, hosted by Squire Patton Boggs’ Birmingham office.

The conference saw a strong turnout of money laundering reporting officers and compliance professionals drawn from a variety of financial services’ business in the Midlands and beyond, including HSBC, Barclays Bank, Deutsche Bank and Svenska Handelsbanken. Presentations covered a wide variety of financial crime related hot topics and offered unique insights into new developments, enforcement trends and unique industry challenges.

The day was chaired by David Pelled, CEO of MLROs.com.   The speakers were: Quinn Perrott (General Manager, TRAction Fintechs), Jason Sugarman QC (Barrister, Foundry Chambers), Jonathan Williams (Former Head of Payments & Strategy, Experian), Denis O’Connor (Financial Crime Expert), Michael Whittington (Head of Employee Screening, The Risk Advisory Group), Mark Rainsford QC (Barrister, 33 Chancery Lane) and Garon Anthony, Chris Webber and Paul Anderson all from Squire Patton Boggs.

The conference was a great success with excellent speakers and thought provoking debate on how to prevent financial crime. Most importantly the conference was very well received by attendees with excellent feedback on the day’s events.

LexBlog