The FSA has vowed to continue to bring enforcement cases against senior management despite losing a high-profile test case which sought to fine former UBS UK wealth management division chief executive John Pottage £100,000 for inadequate supervision.
The FSA published a decision notice against Pottage in October 2010, which imposed a £100,000 fine for misconduct and for failing to act earlier to implement a review of UBS’ systems and controls. Pottage referred the case to the Upper Tribunal and it was heard in November 2011 and in January. The tribunal issued its decision on April 20 and found no evidence of misconduct.
The tribunal’s judgment, seen by Money Marketing, says: “The FSA has not satisfied us from the evidence that Mr Pottage’s standard of conduct was ’below that which would be reasonable in all the circumstances’.”
FSA acting director of enforcement and financial crime Tracey McDermott says: “The outcome of this case will not deter us from bringing other cases.”
Pottage was appointed chief executive of UBS’ wealth division in September 2006 and carried out a review of the firm’s systems and controls in July 2007. During the period before the review was completed, various incidents occurred, including a £600,000 payment fraud in January 2007.
DAC Beachcroft partner Matthew Rutter says: “Just because something goes wrong does not mean an individual has automatically breached their regulatory obligations.”