The Financial Conduct Authority (FCA) has published decision notices against Timothy Roberts, the chief executive, and Andrew Wilkins, a former director of Catalyst Investment Group Limited (Catalyst). The FCA has decided to fine Roberts £450,000 and ban him from the industry; and fine Wilkins £100,000 and prevent him from holding senior roles in future.
The decision notices reflect the FCA’s view of events and of Roberts and Wilkins’ behaviour. Roberts and Wilkins have referred their cases to the Upper Tribunal, which will reconsider the case and may uphold, vary or cancel the FCA’s decision. The Upper Tribunal’s decision will be published on its website.
Catalyst has also been censured by the FCA for recklessly misleading investors when promoting bonds offered by ARM Asset Backed Securities SA (ARM) between November 2009 and May 2010.
Timothy Roberts was the chief executive of Catalyst and a director of ARM from March 2007. The FCA found Roberts had recklessly approved unfair and misleading communications to investors.
Andrew Wilkins was a director at Catalyst between October 2007 and March 2010. The FCA found he allowed Catalyst to continue promoting ARM bonds and approved misleading communications to investors.
The FCA found that both men failed to act with due skill, care and diligence, and Roberts’ conduct demonstrated a lack of integrity. Furthermore they both failed to inform Catalyst’s compliance officer of the fact that ARM believed it needed a licence to issue the bonds until December 2009.
UK investors have invested £54 million in ARM bonds, including £17.1 million in un-issued ARM bonds, and may lose a significant part of their investment. Those affected should refer to the Financial Services Compensation Scheme for details of how and when to make a claim for compensation.
Notes to Editors
- Decision notices for Timothy Roberts[1] and Andrew Wilkins[2].
- The FCA’s Principles and Code of Practice for Approved Persons[3].
- Catalyst was the primary distributor of the ARM Capital Growth Bond and the ARM Assured Income Plan in the UK. The bonds were listed on the Irish Stock Exchange - trading was suspended in November 2010. These products are a form of ‘Traded Life Policy Investment’ based on life insurance policies purchased in the United States. Typically, securitisation firms purchase these policies from policy holders for a lump sum, and take on responsibility for paying the premiums. When the original policy holder dies, the firm receives the insurance payment.
- The FCA has decided to prevent Wilkins from holding senior roles in the financial services industry. These significant influence functions are set out in the FCA’s approved persons regime and include chief executives, directors and compliance officers.
- The Financial Services Compensation Scheme (FSCS) will oversee compensation arrangements for affected investors. Consumers do not need to take action yet - the FSCS expects to publish information on how to make a claim against Catalyst by the end of the year. Additional information for ARM investors[4].
- The FCA has declared Catalyst to be in default. This means that the FCA takes the view that Catalyst is likely to be unable to satisfy claims made against it – further information[5].
- The Luxembourg financial regulator is the Commission de Surveillance du Secteur Financier (CSSF)[6].
- The Financial Services Compensation Scheme (FSCS) will oversee compensation arrangements for affected investors. Consumers do not need to take action yet - the FSCS expects to publish information on how to make a claim against Catalyst by the end of the year. Additional information for ARM investors[4].
- On the 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA, as well as how it is different to the PRA.