The FSA has banned managing partner of First Colonial Investments LLP George Leavey for “reckless misconduct”.
The regulator says Leavey was carrying out a significant influence function without FSA approval, failing to oversee the segregation and protection of client money and approving misleading financial promotions.
FCI was a stock broking firm based in London. The firm’s sales advisers made telephone sales promoting higher risk securities in companies with small cap shares to retail clients.
Leavey was responsible for the day-to-day running of the stockbroking business and for FCI’s recommendations and sales of shares to clients. However, Leavey failed to register as an approved person, despite carrying out a significant influence role at FCI since its launch in 2006. He also failed to address unsuitable sales practices by FCI’s sales advisers.
FCI received and held client money without having the approvals to do so. The FSA says Leavey, as the managing partner, should have ensured this was segregated from FCI’s own money. He failed to do so, and as a result, at least £883,897 of client money was mixed with the firm’s own asset and was used to pay business expenses at FCI and its unauthorised sister company.
Leavey has referred the matter to the Upper Tribunal.
FSA acting director of enforcement and financial crime Tracey McDermott says: “Being a managing partner of a firm carries substantial responsibility for ensuring that the firm meets its regulatory responsibilities. We believe George Leavey was reckless in his approach to many aspects of the FCI business he was responsible for running.
“The approval of senior managers in authorised firms is a key part of the regulatory framework and a means by which the FSA ensures that authorised firms are properly run and comply with FSA rules. The range of serious regulatory failures in this case shows what can happen when a firm does not have suitable senior managers who are approved by the FSA.”