The complaints commissioner has ordered the FCA to apologise to a firm and pay it £1,000 in compensation, after finding “serious” failings in the way an enforcement investigation was carried out.
The firm complained about the manner in which the regulator undertook an unannounced enforcement visit to its offices in April 2009, as well as its actions leading up to and following the visit.
The individual behind the complaint also claims the regulator has made deliberate attempts to prevent him or her from gaining further employment in financial services.
The individual claimed they had incurred losses of £1.2m as a result of the regulator’s actions.
The complaints commissioner says the FCA accepts that following an oral debrief to the firm, it failed to follow up with written details of its concerns, or the actions it wished the firm to take, in a timely manner.
The regulator also accepts it failed to respond to requests from the firm for details of the action it wanted the firm to take.
The complaints commissioner says: “These failures were serious given the significant concerns the regulator appeared to have had over the risks posed to consumers by your business.
“The regulator has produced no adequate reason why it took its supervision division almost six months to complete its internal reviews and either issue you with a scoping document (setting out the actions it needed you to undertake) or notify you of the decision to refer your case to enforcement.
“The regulator should, wherever possible, particularly in the case of a small firm, look to complete its agreed actions within a short time or, if this is not possible, keep the firm/individual concerned regularly updated.”
The commissioner says delays by the regulator were “indefensible”.
It has concluded there were deficiencies in the way the regulator communicated with the firm before the commencement of its enforcement action, and that the conduct of the investigation “fell below the standard the regulator expects of its staff”.
It has upheld the complaint in part, as it found there is “nothing to indicate (other than in the two instances I have described) the regulator acted inappropriately”.
The FCA says: “The commissioner did not uphold a number of elements of this complaint, noting that in respect of those elements there is nothing to indicate that the regulator acted inappropriately.
“The FCA acknowledges that the commissioner has upheld other elements of the complaint and accepts the recommendations. The FCA will accordingly apologise to the complainant and make an ex gratia payment of £1,000.”