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FSA censures IFA firm and bans director

FSA Financial Services Authority 480

The FSA has issued a public censure of City Gate Money Managers Limited and banned its director and compliance officer Stewart Wallace Domke from holding any significant influence functions.

The FSA would have imposed financial penalties of £180,000 on City Gate and £70,000 on Domke, however City Gate is in liquidation and is unable to pay a fine, while Domke has provided evidence to show that a fine would cause him serious financial hardship.

The FSA says City Gate advised on pension transfer and income drawdown business when it did not have permission to do so.

It also produced a financial promotion that did not comply with FSA rules and could have misled potential investors. The regulator says the firm also failed to have adequate systems and controls in place to monitor and oversee its advisers and appointed representatives.

This is the second time the FSA has taken action against City Gate. In July 2009, the FSA fined the firm £42,000 for systems and controls failings around the approval of financial promotions and inadequate monitoring of appointed representatives.

The FSA found that Domke failed to address the failures identified by the FSA’s first action against City Gate and ensure the firm only performed the regulated activities that it was authorised to perform.

He also failed to ensure that a financial promotion issued by City Gate complied with FSA rules and delegated important compliance functions to others but failed to oversee their work, resulting in serious compliance failures at City Gate.

The FSA says Domke allowed City Gate to operate without having adequate systems and controls in place.

FSA head of retail enforcement Bill Sillett says: “City Gate is a repeat offender. It is rare that the FSA has to take action against a firm more than once, but City Gate’s systems and controls remained poor despite our first enforcement action. City Gate failed to take adequate steps to address the failings we identified.

“The fact that City Gate provided advice it did not have permission to give is inexcusable. It seriously aggravated the case against the firm.

“As a director and compliance officer, Domke had the opportunity to improve compliance at City Gate but failed to do so, leaving in place inadequate systems and controls and failing to monitor or check City Gate’s appointed representatives.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “Domke has provided evidence to show that a fine would cause him serious financial hardship”.

    This beggars belief – here we have a man who has basically got away with it. He was a repeat offender and clearly treated the previous FSA findings with utter contempt. If he can`t afford the fines then for God`s sake throw him in jail !!! I despair of the justice system in this country

  2. Andrew Boyett-Camp 9th August 2012 at 2:07 pm

    What complete rubbish. I agree with the first comment. Where else would you simply avoid a jail sentence if unable to pay a fine and/or bail? A farce. And yet the FSA seem quite capable of imposing draconian fees/levies on the good guys!

  3. man on the moon 9th August 2012 at 6:57 pm

    Think perspective re the FSA is helpful here.

    They acted twice against this outfit. If they were too hasty they are criticised and if too slow the same.

    Cannot understand the ‘non compliant’ transactions re authorisations but if they were not authorised they should not have done the business.

    In addition, from experience if the case is classed as a Pension Transfer rather than a switch then some Providers actively seek to clarify the advisors authorisation. They will not allow a case to conclude if permissions do not exist.

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