Mr Reynolds has referred the matter to the Upper Tribunal (the Tribunal) where he and the FCA will each present their case. The Tribunal will then determine the appropriate action for the FCA to take. The Tribunal may uphold, vary or cancel the FCA’s decision. The Tribunal’s decision will be made public on its website.
The Decision Notice[1], states that the FCA has decided to fine Mr Reynolds £290,344 and ban him from performing any function in relation to any regulated activities on the basis that he is not fit and proper because he lacks integrity.
The decision is provisional in that it is being challenged in the Tribunal. The Decision Notice reflects the FCA’s view of what occurred and how the behaviour is to be characterised. It states that the FCA’s belief is that between 2005 and 2010 while he was an approved person at Aspire Personal Finance Limited (previously known as Positive Financial Strategies Limited), Mr Reynolds:
- recklessly recommended high risk investment products to eight retail clients, when he knew that he could not justify their suitability;
- was knowingly involved in the falsification of the signatures of two clients on sophisticated investor certificates to suggest that the investment could be legitimately promoted;
- deliberately made investments on behalf of two clients without their knowledge or authorisation;
- deliberately produced inflated valuations of clients’ investments in an attempt to mislead them and conceal the poor performance of the investments he had recommended;
- deliberately submitted loan facility and investment applications, on behalf of a number of his clients, which contained inflated incomes and other false and misleading information; and
- deliberately attempted to mislead the FCA by retrospectively creating various documents and misrepresenting that they were contemporaneous.
The FCA’s opinion is that the impact of Mr Reynolds’ actions on these eight clients was particularly serious: most of them were on low incomes and had little or no investment experience and the complex and high risk products he recommended were unlikely to be suitable for their needs; in some instances they were unaware that they had invested in unregulated investments or of the associated risks.
Tracey McDermott, director of enforcement and financial crime, said:
'People go to advisers because they want expert help to make the most of their money. They should be able to trust advisers to act in the customer’s best interest and recommend products which will suit their needs.
'It is critical that firms and individuals put their customers’ interests first.'
Mr Reynolds applied to the Tribunal for an order preventing the FCA from publishing the Decision Notice. That application was unsuccessful.
The Tribunal will hear Mr Reynolds’ case on 8 and 9 December 2014.
Notes to editors
- The Decision Notice[1] issued by the Financial Conduct Authority.
- On the 1 April 2013 the Financial Conduct Authority (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.[2]