FSA fines Vantage £700,000
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The FSA has today fined Vantage Capital Markets £700,000 for allowing Daniel Hassell to perform a significant influence function without obtaining the FSA’s approval for more than four years.
The regulator says Vantage knew that Hassell was not an approved person and that the FSA was not satisfied that he was a fit and proper person to perform a significant influence function.
Vantage, an interdealer broker, was formed as a limited liability partnership in 2004 and has three capital partners. Hassell was not a capital partner, he was a “consultant”, but he exercised a significant influence over Vantage.
The majority of the brokerage business was previously owned by Hassell and generated around half of Vantage’s revenues.
Hassell received approximately one third of the firm’s profits, the remainder being shared between the capital partners. Hassell was, on occasion presented as an owner in correspondence and was seen as such by some of the Vantage staff.
At the time of its authorisation, Vantage applied for Hassell to be an approved person as partner of Vantage, but Hassell was the subject of an FSA investigation.
The FSA informed Vantage of its concerns about Hassell and Vantage withdrew the application.
In February 2007, the FSA told Hassell that he was no longer being investigated. Vantage applied again for approval for Hassell, but withdrew the application after the FSA indicated that it would not approve Hassell to perform a significant influence function due to issues arising from the investigation.
Despite this Vantage failed to prevent Hassell from exercising a significant influence over the firm until an FSA supervisory visit in 2009.
Vantage co-operated with the FSA and qualified for a 30 per cent discount under the FSA’s settlement discount scheme. Without the discount, the fine would have been £1m.
FSA director of enforcement and financial crime Margaret Cole says: “Vantage failed to prevent an individual from acting in a significant influence role without FSA approval. This was despite the fact that Vantage knew that the FSA did not regard that individual as a suitable person to manage the firm.
“Ensuring that the right people are running firms is a key element in our regulatory regime. Firms that do not comply with our rules can expect a tough response from the FSA.”
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Readers' comments (5)
Anonymous | 21 Jun 2010 12:05 pm
I don't believe the the people who worked for the FSA were right and proper people. The way they regulated the banks almost to total collapse is proof. When will they be accounted for?. looks like they got their nice big bonuses just in time before leaving.
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Julian Stevens | 21 Jun 2010 12:18 pm
In one breath the FSA announced that Hassell was no longer being investigated, from which one might reasonably assume that to have been the end of the matter.
Then, the FSA declared "that it would not approve Hassell to perform a significant influence function due to "issues" arising from the investigation." Why? What "issues"? Either there were issues which would have warranted the investigation being pursued or there were not.
As reported here, what seems to have happened is that the FSA was forced to conclude that it didn't have sufficient evidence to complete its investigation but decided anyway that it wouldn't authorise Hassell to assume a position of significant influence. On that basis, the FSA is effectively free to block anybody's application for anything without offering any explanation as to why beyond the fact that they don't like him/her. Which, when you think about it, seems to be pretty much the basis on which the re-authorisations of most of the Park Row people have been obstructed indefinitely. And because the FSA is so powerful and unaccountable, there's nothing anyone can do about it which is an extremely unhealthy state of affairs.
Yet, on its website, the FSA proclaims itself to be "an open and transparent regulator". Stories such as this suggest otherwise and lends weight to calls for the creation of an Independent Regulatory Standards Committee or, at the very least, for the Department for Business Enterprise & Regulatory Reform to pull its finger out and make some effort to enforce the Statutory Code of Practice For Regulators.
We seem to be living under a yoke of unaccountable totalitarian regulatory tyranny, with the FSA holding all the cards and basically doing whatever it pleases.
This is not, of course, to say that Hassell should have acted in a position of significant influence without authorisation, but one wonders why Vantage didn't seek to challenge the FSA's decision. All very odd.
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StraightTalker | 21 Jun 2010 12:22 pm
The FSA is a club, has been and always will be, you have to be in bed at a monetary level with either a connected person or an influential person such as a lord before they budge.
Its because of this elusive and exclusive way of working which prevents honest new companies forming offering great alternative services, and end result is that we're stuck with the old companies and people, the UK needs to scrap the FSA completely, including disbanding its senior execs if it is ever to get a real hold on financial matters... theres too many monkey back-scratchers floating around our financial sector and the FSA lot are the gorillas in the pack.
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Anonymous | 21 Jun 2010 1:31 pm
Different process, different requirements.
For example, a tendency for mendacity or stupidity will not normally lead to enforcement or sanctions as there are specific legal criterion to fulfill for these measures. But they can be used as factors to consider for approving controlled functions.
As Julian states, the firm could have continued with the approvals process and if it had been declined, they could have appealed the points that FSA raised for not approving him. That they didn’t is interesting. It makes me think they were trying to be clever in pretending he didn't have significant influence and failed miserably. It is also possible they had only employed quality staff in what they believed were the ‘important’ functions and neglected the risk and compliance areas that could have helped them through the process and could have challenged the FSA.
It may be that the FSA behaved atrociously throughout the whole process but based on the information here there isn’t anything to indicate that. The conspiracy theorists that post in here on the subject of the FSA generally make me giggle until I realise they are possibly using that same great intellectual capacity to advise customers. At that point I fear for the future of the IFA industry.
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Richard Hammond | 21 Jun 2010 1:37 pm
I agree with the "I don't believe the the people who worked for the FSA were right and proper people..........." school of thought. but can people start to put some slightly more imaginative content on here.
This is just getting too boring!! We all know they are tos**rs, just change the record!!!!!!
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