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IFA’s appeal against FCA permission cancellation withdrawn

Upper Tribunal appeal reference withdrawn after FCA cancelled IFA’s permissions over jail sentence

Royal Court of Justice High Court 480

An IFA firm’s appeal against an FCA decision to cancel its permissions has been withdrawn.

Milton Keynes-based KWS Wealth Management Limited had its permissions withdrawn by the FCA last April after its sole director Keith Smith, received a prison sentence.

According to local media reports, Smith was sentenced to a year in jail, suspended for 24 months, over a fraudulent life insurance claim where Smith failed to declare that his dying wife had been diagnosed with cancer before taking out a £200,000 Aviva policy.

According to the FCA’s decision notice, Smith contended that his actions were “the result of extreme, personal circumstances” and “completely out of character”.

He added that in his 25 years as an IFA he had never received any client complaints.

While the FCA decided against banning Smith, it noted that judge had ruled that Smith had “abused his position and his knowledge of the financial services industry by perpetrating the fraud,” and Smith could not be a “fit and proper person” under the relevant rules due to the dishonest nature of the offence.

The FCA said: “In the circumstances and given Mr Smith’s close connection to KWS (as the sole director, sole shareholder of shares with voting rights and sole approved person at the firm), KWS has not demonstrated that it conducts and will continue to conduct its business with integrity and in compliance with proper standards.”

The appeal was due to go before the Upper Tribunal today, but court records note that the reference has been withdrawn and the hearing vacated.

KWS and Keith Smith were still listed as active on the FCA’s register with the necessary permissions at the time of writing.

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

  1. Dominic Thomas 11th July 2017 at 9:24 am

    Seems very sad. He’s lost his wife and his business, judging only on the content he committed one act of fraud, which presumably he had the funds to fully repay. Certainly a breach of rules and standards, but easily corrected and I imagine easy to establish if this was genuinely the first breach. Surely a better resolution possible than trial?

  2. Denis Mitchell 11th July 2017 at 9:58 am

    I’m afraid he is too far down the food chain to get off lightly. It seems even going to jail isn’t enough to lose your title.

  3. Yes it is very sad but, given the nature of the offence, it is difficult to see what choice the FCA had. One can only hope that Mr Smith is not totally ruined as a person and can get his life back together, eventually.

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