The relationship between the FCA and the Upper Tribunal

Will the Financial Conduct Authority (FCA) always follow the Upper Tribunal’s ruling and, if not, what are the implications? Marcus Bonnell, counsel, and Rebecca Dulieu, associate in the regulatory group at RPC, comment on a recent ruling and highlight the lessons for individuals.

Original news

Roberts and another v Financial Conduct Authority [2015] Lexis Citation 225

What is the background to the case?

On 11 August 2015, the Upper Tribunal released its judgment in relation to Timothy Roberts and Andrew Wilkins of Catalyst Investment Group Limited (Catalyst). The tribunal released additional reasons for its determination on 18 September 2015. The conclusion of the proceedings before the tribunal has brought to a conclusion a long running investigation arising from the distribution of ‘traded life policy investments’ products by Catalyst.

Mr Roberts had been a director and the chief executive of Catalyst, which had been the primary UK distributor of bonds issued by ARM Asset Backed Securities SA (ARM). Mr Roberts had also been a director of ARM. Mr Wilkins was a director of Catalyst until 23 March 2010, and like Mr Roberts, was involved in compliance issues, especially in relation to financial promotions.

ARM was a securitisation vehicle based in Luxembourg. Its bond programme was registered with the Irish Stock Exchange and traded on its regulated market. ARM needed a licence to issue bonds from the Luxembourg regulator but did not have one. In November 2009, the Luxembourg regulator requested ARM to stop issuing bonds. Trading in the bonds on the Irish Stock Exchange was suspended in November 2010.

In August 2013, the FCA decided to fine Mr Roberts £450,000 and impose a full prohibition on him, and to fine Mr Wilkins £100,000 and prohibit him from undertaking significant influence functions. The FCA had taken this action primarily because of failings in relation to communications with current and prospective customers. In particular, the FCA found that notwithstanding the absence of a licence, Mr Roberts, had continued to promote the bonds while he had also approved a letter to investors containing misleading information about ARM’s licensing status. Mr Robe