Regulatory shortcomings as a ground for disqualification (Re Brooklands Trustees Ltd)

Article summary

Pensions analysis: This case considers the relevance of the Financial Conduct Authority’s (FCA’s) Principles for Businesses and good practice material when an application for disqualification orders is made on the basis of regulatory failings. The defendants were the directors of a company which provided savings and investment products, including self-invested personal pension schemes (SIPPs). Following unsuccessful investments by customers in SIPPs, regulatory failings were found to have occurred and the company went into administration. The judge, distinguishing Adams v Options SIPP UK LLP, held that for the purposes of the disqualification jurisdiction misconduct might occur without a breach of statutory duty and the Principles for Businesses and good practice material were relevant in determining whether there had been misconduct. He went on to decide that there had been misconduct, but that it was not such as to justify disqualification or to render the directors unfit. The case helpfully clarifies when regulatory material other than rules may be relevant to an issue...