A report into the FCA’s ill-fated media briefing that sent insurer share prices tumbling earlier this year has revealed a catalogue of failings that show key members of staff were not even aware the briefing had taken place.
The inquiry by Clifford Chance partner Simon Davis also reveals that staff repeatedly failed to raise the alarm that the briefing had resulted in an article which focused on a price sensitive issue.
On reading the article on the evening of 27 March, the media associate who conducted the briefing sent a message to his manager via WhatsApp to say: “A bit sensational, but it seems about right”.
FCA head of supervision Clive Adamson, who authorised the briefing in principle but was not aware it had taken place, was sent the full text of the article in an email from the media manager on the morning of 28 March.
He replied saying “Thanks – looks good”, but did not read the article despite knowing his team had concerns about the briefing.
The FCA decided to brief The Telegraph on its review of closed book policies as part of a series of stories in the press in advance of its business plan in order to improve coverage.
Adamson authorised the interview but said he expected to be consulted further before it took place. The telephone interview was given by FCA director of long-term savings and pensions Nick Poyntz-Wright, and quotes were attributed to Adamson.
The aim of the briefing was to make sure it was understood the closed book review was a discovery piece of work only and that its scope on exit fees would be limited.
However, following the pension reforms announced in the Budget on 19 March, those working on the closed book review became “increasingly nervous” at the decision to brief The Telegraph.
One email said: “My view is we shouldn’t do a press story on this.” Another email raised concerns that an announcement in the press “just piles the misery onto life companies” who had “taken a battering this week”.
Despite the concerns, Adamson and Poyntz-Wright agreed to go ahead with the briefing, as long as the Association of British Insurers was kept informed.
However, the ABI was not due to be briefed until Friday 28 March – the day after the story came out.
The Davis report says the article came “as a surprise” to the FCA because there was confusion over when it would be published. There was also no contingency plan in place should the coverage not go as expected.
The media manager believed the story would be published on Saturday, whereas the media associate knew it was due to appear on Friday but was himself taken by surprise that it appeared online on the evening of Thursday 27 March.
The content of the article focused on exit fees: exactly what the FCA had sought to avoid.
However, the media relations team failed to raise the alarm on the morning of 28 March that the story created an inaccurate impression, with the media associate telling the journalist he was “happy with it”.
Other senior figures, including director of markets David Lawton, also failed to escalate the issue to chief executive Martin Wheatley.
The Davis report singles out Adamson, Lawton, Poyntz-Wright, Wheatley and director of communications Zitah McMillan for criticism.
McMillan told Davis she did not know of or authorise the briefing, but the media associate and his manager said she did know.
McMillan also said she understood interviews with journalists were always recorded. This was not the understanding of the media manager or the associate, who said he had never recorded an interview with a journalist. The Telegraph interview was not recorded.
The FCA announced earlier this week that McMillan and Adamson are to leave the regulator as part of a restructure.