The FCA has been ordered to pay out to the ex-chief executive of collapsed IFA Tailormade for the regulator’s conduct during a case against him.
According to a decision from the Upper Tribunal, the regulator caused a delay to proceedings in a case in which Alistair Burns was accused by the FCA of pension transfer suitability failures, and should pay him £4,440 of his legal costs as a result.
In the decision from 26 January Judge Tim Herrington rejected a number of claims Burns, who represented himself, made against the conduct of the FCA in its legal battle with him.
However, Herrington did agree the regulator had failed to establish early enough at what point the statute of limitations concerning the advice Burns gave started to run.
The tribunal heard this impacted settlement talks with Burns. The ex-adviser was ultimately banned from holding any senior management position in financial services and fined £233,600. Following an appeals tribunal in August the original fine was dropped to £60,000.
Herrington said: “I have decided that in the circumstances it is appropriate that I should make a limited costs order.
“To do so will send out an important message to the [FCA] that, even in circumstances of what is found to be serious misconduct on the part of the applicant, which I accept is the position here, it is imperative that all subjects of investigation and enforcement proceedings should be treated fairly and reasonably.
“There have been a number of significant instances in this case where I have found that the [FCA] has fallen below the standards that should reasonably be expected of it.”
Burns had claimed the FCA should compensate all of his legal costs because, he claimed, there was collusion between the agency’s enforcement and decisions divisions. However the £4,440 compensation to Burns amounts to only a quarter of his legal costs.
He had also claimed it was not just some of the advice in question which was time-barred but that the conflict of interest the FCA accused him of was also time-barred. Herrington rejected this claim.
The conflict of interest arose from investment advice given between January 2010 and January 2013.
Clients were advised to move a total of £112m into unregulated investments such as green oil, biofuels, farmland and overseas property via Sipps while Burns received significant financial benefit working as both a director and as a shareholder of an unregulated introducer operating under the Tailormade brand.
According to a freedom of information request made by Money Marketing, the FCA spent a total of £320,000 in legal fees pursuing the case with Burns between August 2015 and October 2018.